The Office of the US Trade Representative raised its tariffs on imports of large European aircraft to 15%, up from 10% set in October last year during a dispute over subsidies.
“The United States is raising the additional tax rate on aircraft imported from the EU to 15%, from 10%, effective March 18, 2020, and making other minor modifications”, USTR said in a statement published on February 14.
At the heart of the ruling last October were EU subsidies to Airbus, which the arbitrator strongly criticized for being “WTO inconsistent” and having adverse effects on the US.
While the USTR is allowed to impose tariffs of up to 100% on $7,5 billion worth of goods - including Airbus jets - the office said at the time it would initially place 10% duties on new commercial aircraft over 30 tonnes and 25% on other products such as Irish and Scotch whisky, German machinery and cheese.
The increase to 15% is a response to a World Trade Organization (WTO) report relating to a long-standing subsidy dispute involving Airbus. That report, released on 2 December, concluded that changes made to the A350 and A380 development loans were insufficient to bring European governments into compliance with WTO recommendations.
On December 12, the US Trade Representative announced a review of the tariffs and requested public comment. He says he received over 26.000 responses.
Airbus has a large US presence, including an A320 and A220 assembly site in Mobile, Alabama. However, Airbus still exports some aircraft to the US, such as those produced in Toulouse and Hamburg.
It is worth noting that aircraft components, which are shipped to Alabama, are exempt from this 15% tariff.
About 40% of Airbus' order book is related to US airlines.
