USTR Announces Joint U.S.-E.U. Cooperative Framework for Large Civil Aircraft

On June 15, 2021, the United States and the European Union announced a cooperative framework to address the large civil aircraft disputes. The agreement moves away from past confrontation in pursuit of a cooperative future by suspending the tariffs related to this dispute for five years. The U.S. and the EU also agreed to clear principles, including their shared intent that any financing for the production or development of large civil aircraft on market terms.

U.S. Seeks Cooperation with EU in Addressing China Challenge

On May 14, 2021, United States Trade Representative Katherine Tai met virtually with European Commission Executive Vice President Valdis Dombrovskis to discuss opportunities to strengthen economic ties between the United States and the European Union and resolve the long-running dispute over large civil aircraft subsidies. Ambassador Tai expressed her commitment to finding a permanent solution, before the tariff suspension expires in July, that that levels the playing field and creates a platform for future cooperation to address the shared challenges from non-market economies, such as China.

Punitive 25% Tariff on Wool and Cashmere Articles from the UK Lifted

On March 4, 2021, the United States and the United Kingdom released a joint statement announcing a four-month suspension of tariffs related to the ongoing large civilian aircraft dispute.

“The United Kingdom and the United States are undertaking a four-month tariff suspension to ease the burden on industry and take a bold, joint step towards resolving the longest running disputes at the World Trade Organization.

“The United Kingdom ceased applying retaliatory tariffs in the Boeing dispute from January 1, 2021 to de-escalate the issue and create space for a negotiated settlement to the Airbus and Boeing disputes.

“The United States will now suspend retaliatory tariffs in the Airbus dispute from March 4, 2021, for four months. This will allow time to focus on negotiating a balanced settlement to the disputes, and begin seriously addressing the challenges posed by new entrants to the civil aviation market from non-market economies, such as China."

The textile products of the United Kingdom described below were subject to additional import duties of 25 percent ad valorem, this punitive additional tariff will be suspended for four months while a permanent settlement to the dispute:

HTS	Subheading Product Description
6110.11.00	Sweaters, pullovers, sweatshirts, waistcoats (vests) and similar articles, knitted or crocheted, of wool
6110.12.10	Sweaters, pullovers, sweatshirts, waistcoats (vests) and similar articles, knitted or crocheted, of Kashmir goats, wholly of cashmere
6110.20.20	Sweaters, pullovers and similar articles, knitted or crocheted, of cotton, nesoi*
6110.30.30	Sweaters, pullovers and similar articles, knitted or crocheted, of man-made fibers, nesoi
6202.99.15	Recreational performance outwear, women's/girls' anoraks, wind-breakers & similar articles, not knitted or crocheted, of other textile materials (not wool, cotton or MMF), containing <70 percent by weight of silk
6202.99.80	Women's/girls' anoraks, wind-breakers & similar articles, not knitted or crocheted, of other texile materials (not wool, cotton or MMF), containing <70% by weight of silk,
6203.11.60	Men's or boys' suits of wool, not knitted or crocheted, nesoi, of wool yarn with average fiber diameter of 18.5 micron or less
6203.11.90	Men's or boys' suits of wool or fine animal hair, not knitted or crocheted, nesoi
6203.19.30	Men's or boys' suits, of artificial fibers, nesoi, not knitted or crocheted
6203.19.90	Men's or boys' suits, of textile mats(except wool, cotton or MMF), containing under 70 percent by weight of silk or silk waste, not knit or crocheted
6208.21.00	Women's or girls' nightdresses and pajamas, not knitted or crocheted, of cotton
6211.12.40	Women's or girls' swimwear, of textile materials(except MMF), containing 70% or more by weight of silk or silk waste, not knit or crocheted
6211.12.80	Women's or girls' swimwear, of textile materials(except MMF), containing under 70% by weight of silk or silk waste, not knit or crocheted
6301.30.00	Blankets (other than electric blankets) and traveling rugs, of cotton
6301.90.00	Blankets and traveling rugs, nesoi
6302.21.50	Bed linen, not knit or crocheted, printed, of cotton, cont any embroidery, lace, braid, edging, trimming, piping or applique work, n/napped
6302.21.90	Bed linen, not knit or croc, printed, of cotton, not cont any embroidery, lace, braid, edging, trimming, piping or applique work, not napped

* NESOI means Not Elsewhere Specified or Included.

BACKGROUND
In October 2019, the WTO authorized the United States to take $7.5 billion in countermeasures following the largest victory in WTO history in the long-running dispute against the EU, France, Germany, Spain, and the United Kingdom regarding their illegal subsidies for the Airbus consortium. Following a notice and comment process, on October 9, 2019, the United States imposed additional tariffs of up to 25 percent on products of current and former EU member states with a trade value of approximately $7.5 billion. The section 301 statute provides for periodic review and modification of the tariff action.

AAFA along with 71 associations sent a letter to the European Union (EU) and the U.S. to remove, or at least suspend all additional and retaliatory tariffs affecting or threatening Trans-Atlantic trade.

The Amereican Apparel and Footwear Association along with 71 associations sent a letter to the European Union (EU) and the U.S. to remove, or at least suspend all additional and retaliatory tariffs affecting or threatening Trans-Atlantic trade.

Read the letter HERE

USTR Modifies $7.5 Billion Tariff Action Relating to Illegal Airbus Subsidies, Wool and Cashmere Articles from UK Remain on List

On December 30, 2020, the United States Trade Representative issued a modification to the list of products subject to WTO-authorized additional duties in the United States' successful WTO challenge to subsidies for large civil aircraft provided by the European Union, France, Germany, Spain, and the United Kingdom. The U.S. Trade Representative has determined that the additional products should be goods of France and Germany are ustified, as these countries have provided the greatest level of WTO-inconsistent large civil aircraft subsidies. The additional articles subject to this action are certain wine and spirits and certain aircraft components.

The modifications announced yesterday will take effect on January 12, 2021.

Currently textile products of the United Kingdom described below are subject to additional import duties of 25 percent ad valorem, there is no change to this list:

HTS	Subheading Product Description
6110.11.00	Sweaters, pullovers, sweatshirts, waistcoats (vests) and similar articles, knitted or crocheted, of wool
6110.12.10	Sweaters, pullovers, sweatshirts, waistcoats (vests) and similar articles, knitted or crocheted, of Kashmir goats, wholly of cashmere
6110.20.20	Sweaters, pullovers and similar articles, knitted or crocheted, of cotton, nesoi*
6110.30.30	Sweaters, pullovers and similar articles, knitted or crocheted, of man-made fibers, nesoi
6202.99.15	Recreational performance outwear, women's/girls' anoraks, wind-breakers & similar articles, not knitted or crocheted, of other textile materials (not wool, cotton or MMF), containing <70 percent by weight of silk
6202.99.80	Women's/girls' anoraks, wind-breakers & similar articles, not knitted or crocheted, of other texile materials (not wool, cotton or MMF), containing <70% by weight of silk,
6203.11.60	Men's or boys' suits of wool, not knitted or crocheted, nesoi, of wool yarn with average fiber diameter of 18.5 micron or less
6203.11.90	Men's or boys' suits of wool or fine animal hair, not knitted or crocheted, nesoi
6203.19.30	Men's or boys' suits, of artificial fibers, nesoi, not knitted or crocheted
6203.19.90	Men's or boys' suits, of textile mats(except wool, cotton or MMF), containing under 70 percent by weight of silk or silk waste, not knit or crocheted
6208.21.00	Women's or girls' nightdresses and pajamas, not knitted or crocheted, of cotton
6211.12.40	Women's or girls' swimwear, of textile materials(except MMF), containing 70% or more by weight of silk or silk waste, not knit or crocheted
6211.12.80	Women's or girls' swimwear, of textile materials(except MMF), containing under 70% by weight of silk or silk waste, not knit or crocheted
6301.30.00	Blankets (other than electric blankets) and traveling rugs, of cotton
6301.90.00	Blankets and traveling rugs, nesoi
6302.21.50	Bed linen, not knit or crocheted, printed, of cotton, cont any embroidery, lace, braid, edging, trimming, piping or applique work, n/napped
6302.21.90	Bed linen, not knit or croc, printed, of cotton, not cont any embroidery, lace, braid, edging, trimming, piping or applique work, not napped

* NESOI means Not Elsewhere Specified or Included.

BACKGROUND
In October 2019, the WTO authorized the United States to take $7.5 billion in countermeasures following the largest victory in WTO history in the long-running dispute against the EU, France, Germany, Spain, and the United Kingdom regarding their illegal subsidies for the Airbus consortium. Following a notice and comment process, on October 9, 2019, the United States imposed additional tariffs of up to 25 percent on products of current and former EU member states with a trade value of approximately $7.5 billion. The section 301 statute provides for periodic review and modification of the tariff action.

The details of the modification are set out in a Notice that will be published in the Federal Register.

USTR Responds to UK Statement on WTO Large Civil Aircraft Dispute

On December 8, the United Kingdom (UK) announced that it would not continue tariffs imposed by the European Union (EU) on imports from the United States starting January 1, 2021 in order to de-escalate the large civil aircraft conflict and come to a negotiated solution. The United States welcomes this decision and shares the UK’s objective of reaching a negotiated resolution.

The United States does not agree, however, that the UK would have any authority to impose tariffs. Only the EU sued the United States at the WTO; the UK did not bring a case in its individual capacity. Therefore, the US argues, the UK has no authority from the WTO to participate in any such action after it no longer is part of the EU. By contrast, the United States sued the EU as well as France, Germany, Spain, and the UK individually over massive subsidies to Airbus. As a result, the WTO authorized the United States to impose countermeasures on each of those countries and the entire EU.

The United States has, however, stated that it has exercised great restraint with its retaliatory tariffs. Like the UK, the United States considers that a negotiated settlement best serves the interests of all parties. In that regard, the United States encourages the UK to bring renewed focus to settlement discussions.

United States Responds to European Union Tariff Announcement

On November 9, 2020, United States Trade Representative Robert E. Lighthizer responded to the announcement by the European Union imposing tariffs on certain products from the United States.

“The United States is disappointed by the action taken by the EU today,” Ambassador Lighthizer stated. “The alleged subsidy to Boeing was repealed seven months ago. The EU has long proclaimed its commitment to following WTO rules, but today’s announcement shows they do so only when convenient to them.”

Background

As part of a 16-year-old litigation involving large civil aircraft, the EU alleged that a certain Washington State tax provision benefited Boeing. In response to a WTO panel decision, Washington State unambiguously repealed this tax provision on April 1, 2020. Under such circumstances, a WTO member cannot unilaterally impose retaliatory tariffs on a trading partner.

The USTR is in negotiations with the EU with the hope of resolving this longstanding dispute relating to large civil aircraft.

USTR Modifies $7.5 Billion WTO Award Implementation Relating to Illegal Airbus Subsidies

On August 12, 2020, the United States Trade Representative issued a modification to the list of products subject to WTO-authorized additional duties in the United States' successful WTO challenge to subsidies for large civil aircraft provided by the European Union, France, Germany, Spain, and the United Kingdom. USTR is removing from the tariff list certain products from Greece and the United Kingdom and adding an equivalent amount of trade from France and Germany. The changes are modest; the amount of products subject to countermeasures will remain unchanged at $7.5 billion and the tariff rates will remain unchanged at 15% for aircraft and 25% for all other products.

"The EU and member states have not taken the actions necessary to come into compliance with WTO decisions," Ambassador Robert Lighthizer stated. "The United States, however, is committed to obtaining a long-term resolution to this dispute. Accordingly, the United States will begin a new process with the EU in an effort to reach an agreement that will remedy the conduct that harmed the U.S. aviation industry and workers and will ensure a level playing field for U.S. companies."

The modifications announced today will take effect on Sept. 1, 2020.

Currently textile products of the United Kingdom described below are subject to additional import duties of 25 percent ad valorem, there is no change to this list:

HTS	Subheading Product Description
6110.11.00	Sweaters, pullovers, sweatshirts, waistcoats (vests) and similar articles, knitted or crocheted, of wool
6110.12.10	Sweaters, pullovers, sweatshirts, waistcoats (vests) and similar articles, knitted or crocheted, of Kashmir goats, wholly of cashmere
6110.20.20	Sweaters, pullovers and similar articles, knitted or crocheted, of cotton, nesoi*
6110.30.30	Sweaters, pullovers and similar articles, knitted or crocheted, of man-made fibers, nesoi
6202.99.15	Recreational performance outwear, women's/girls' anoraks, wind-breakers & similar articles, not knitted or crocheted, of other textile materials (not wool, cotton or MMF), containing <70 percent by weight of silk
6202.99.80	Women's/girls' anoraks, wind-breakers & similar articles, not knitted or crocheted, of other texile materials (not wool, cotton or MMF), containing <70% by weight of silk,
6203.11.60	Men's or boys' suits of wool, not knitted or crocheted, nesoi, of wool yarn with average fiber diameter of 18.5 micron or less
6203.11.90	Men's or boys' suits of wool or fine animal hair, not knitted or crocheted, nesoi
6203.19.30	Men's or boys' suits, of artificial fibers, nesoi, not knitted or crocheted
6203.19.90	Men's or boys' suits, of textile mats(except wool, cotton or MMF), containing under 70 percent by weight of silk or silk waste, not knit or crocheted
6208.21.00	Women's or girls' nightdresses and pajamas, not knitted or crocheted, of cotton
6211.12.40	Women's or girls' swimwear, of textile materials(except MMF), containing 70% or more by weight of silk or silk waste, not knit or crocheted
6211.12.80	Women's or girls' swimwear, of textile materials(except MMF), containing under 70% by weight of silk or silk waste, not knit or crocheted
6301.30.00	Blankets (other than electric blankets) and traveling rugs, of cotton
6301.90.00	Blankets and traveling rugs, nesoi
6302.21.50	Bed linen, not knit or crocheted, printed, of cotton, cont any embroidery, lace, braid, edging, trimming, piping or applique work, n/napped
6302.21.90	Bed linen, not knit or croc, printed, of cotton, not cont any embroidery, lace, braid, edging, trimming, piping or applique work, not napped

* NESOI means Not Elsewhere Specified or Included.

BACKGROUND
In October 2019, the WTO authorized the United States to take $7.5 billion in countermeasures following the largest victory in WTO history in the long-running dispute against the EU, France, Germany, Spain, and the United Kingdom regarding their illegal subsidies for the Airbus consortium. Following a notice and comment process, on October 9, 2019, the United States imposed additional tariffs of up to 25 percent on products of current and former EU member states with a trade value of approximately $7.5 billion. The section 301 statute provides for periodic review and modification of the tariff action. A prior revision was made in February 2020.

The details of the modification are set out in a Notice that will be published in the Federal Register.

Several Textile Articles from Europe Face Potential Tariff Hikes

On June 26, 2020, the Office of the U.S. Trade Representative published in the Federal Register (85 FR 38488) notice that it is conducting a review of the action being taken in the Section 301 investigation involving the enforcement of U.S. World Trade Organization (WTO) rights in the Large Civil Aircraft dispute. In connection with this review, the U.S. Trade Representative is considering modifying the list of products of certain current or former European Union (EU) member States that currently are subject to additional duties. Annex I to this notice contains the list of products currently subject to additional duties. Annex II contains a list of products, originally published in the April and July 2019 notices in this investigation, under consideration but not currently subject to additional duties. Annex III contains a new list of products being considered for imposition of additional duties. The Office of the United States Trade Representative (USTR) requests comments with respect to whether products listed in Annex I should be removed from the list or remain on the list; whether the rate of additional duty on specific products should be increased, up to a level of 100 percent; whether additional duties should be imposed on specific products listed in Annex II or Annex III; and on the rate of additional duty of up to 100 percent to be applied to any products drawn from Annex II or Annex III. On June 26, 2020, USTR is opening an electronic portal for submission of comments regarding the review of the action.

Comments are due by July 26, 2020.

Currently textile products of the United Kingdom described below are subject to additional import duties of 25 percent ad valorem:

HTS	Subheading Product Description
6110.11.00	Sweaters, pullovers, sweatshirts, waistcoats (vests) and similar articles, knitted or crocheted, of wool
6110.12.10	Sweaters, pullovers, sweatshirts, waistcoats (vests) and similar articles, knitted or crocheted, of Kashmir goats, wholly of cashmere
6110.20.20	Sweaters, pullovers and similar articles, knitted or crocheted, of cotton, nesoi*
6110.30.30	Sweaters, pullovers and similar articles, knitted or crocheted, of man-made fibers, nesoi
6202.99.15	Recreational performance outwear, women's/girls' anoraks, wind-breakers & similar articles, not knitted or crocheted, of other textile materials (not wool, cotton or MMF), containing <70 percent by weight of silk
6202.99.80	Women's/girls' anoraks, wind-breakers & similar articles, not knitted or crocheted, of other texile materials (not wool, cotton or MMF), containing <70% by weight of silk,
6203.11.60	Men's or boys' suits of wool, not knitted or crocheted, nesoi, of wool yarn with average fiber diameter of 18.5 micron or less
6203.11.90	Men's or boys' suits of wool or fine animal hair, not knitted or crocheted, nesoi
6203.19.30	Men's or boys' suits, of artificial fibers, nesoi, not knitted or crocheted
6203.19.90	Men's or boys' suits, of textile mats(except wool, cotton or MMF), containing under 70 percent by weight of silk or silk waste, not knit or crocheted
6208.21.00	Women's or girls' nightdresses and pajamas, not knitted or crocheted, of cotton
6211.12.40	Women's or girls' swimwear, of textile materials(except MMF), containing 70% or more by weight of silk or silk waste, not knit or crocheted
6211.12.80	Women's or girls' swimwear, of textile materials(except MMF), containing under 70% by weight of silk or silk waste, not knit or crocheted
6301.30.00	Blankets (other than electric blankets) and traveling rugs, of cotton
6301.90.00	Blankets and traveling rugs, nesoi
6302.21.50	Bed linen, not knit or crocheted, printed, of cotton, cont any embroidery, lace, braid, edging, trimming, piping or applique work, n/napped
6302.21.90	Bed linen, not knit or croc, printed, of cotton, not cont any embroidery, lace, braid, edging, trimming, piping or applique work, not napped

*

NESOI means Not Elsewhere Specified or Included.

Addition tariffs, up to 100%, are being considered for several textile articles from Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom.

U.S. Notifies Full Compliance in WTO Aircraft Dispute

On May 6, 2020, The United States notified the World Trade Organization (WTO) that it has fully complied in the dispute brought by the European Union (EU) regarding U.S. subsidies to Boeing. In April 2019, the WTO found that the Washington State Business & Occupation (B&O) tax rate reduction continued to breach WTO subsidy rules. At that time, the EU was unsuccessful on the remainder of its challenges to 29 state and federal programs alleged to harm Airbus.

Washington enacted Senate Bill 6690 on March 25, 2020, which eliminated a preferential tax rate for aerospace manufacturing. The removal of the subsidy fully implements the WTO’s recommendation to the United States, bringing an end to this long-running dispute.

Background

After many years of seeking unsuccessfully to convince the EU and four of its member States (France, Germany, Spain, and the United Kingdom) to cease their subsidization of Airbus, in 2004 the United States brought a WTO challenge to EU subsidies. The EU responded by challenging what it claimed were even larger subsidies to Boeing by the United States.

Two separate WTO panels addressed the claims brought by the United States and the EU, respectively. The two processes resulted in two very different sets of WTO findings and subsequent respondent actions.

The U.S. Claims Against the EU

In 2011, the WTO found that the EU provided Airbus $17 billion in subsidized financing from 1968 to 2006, and that European "launch aid" subsidies breached WTO rules because they were instrumental in permitting Airbus to launch every model of its large civil aircraft, causing Boeing to lose sales of more than 300 aircraft and to lose market share throughout the world.

In response, the EU removed two minor subsidies, but left most of them unchanged. The EU also granted Airbus more than $5 billion in new subsidized "launch aid" financing for its A350 XWB family of aircraft. The United States filed a complaint in March 2012 alleging that the EU not only had failed to comply with the WTO’s findings but had further breached WTO rules through the new subsidized financing for the A350 XWB.

The WTO compliance panel and appellate reports found that EU subsidies to high-value, twin-aisle aircraft continued to cause serious prejudice to U.S. interests. The reports found that billions of dollars in launch aid to the A350 XWB cause significant lost sales of Boeing 787 aircraft. The reports also found that subsidies to the A380 continue to cause significant lost sales of Boeing aircraft, as well as impedance of exports of Boeing very large aircraft to the EU, Australia, China, Korea, Singapore, and UAE markets.

In 2018, the United States requested authority to impose countermeasures commensurate with the adverse effects that the EU subsidies continued to cause. The EU challenged the U.S. estimate, and a WTO arbitrator found that the annual adverse effects to the United States amounted to $7.5 billion per year. The United States imposed countermeasures in October 2019, consistent with the WTO’s authorization.

The EU Claims Against the United States

The EU's original 2004 complaint alleged that the United States provided unlawful subsidies to Boeing. In that dispute, the WTO found that the United States provided Boeing with $3.2-4.3 billion in subsidized research and development funding, certain federal tax benefits, and the Washington State preferential B&O tax, with far more limited market effects than the EU's subsidies to Airbus, which enabled launch of entirely new aircraft programs.

In response to the WTO's findings, the United States modified the research and development funding and revoked much of the tax benefits, which in its view removed any adverse effects to the EU from Washington B&O tax rate reduction. The EU then filed a compliance challenge in October 2012 alleging that the United States failed to comply with the findings against it. The WTO compliance panel issued a report in June 2017, which rejected 28 of the EU’s 29 claims. The appellate report likewise found only that the Washington B&O tax rate reduction continued to cause adverse effects to Airbus. The EU subsequently asked a WTO arbitrator in 2019 to determine the level of countermeasures it could take in response to U.S. non-compliance. The decision in the arbitration is expected later this year.

USTR Announces Formation of Bilateral Evaluation and Dispute Resolution Office Pursuant to U.S.-China Phase One Agreement

On February 14, 2020, the Office of the United States Trade Representative announced the formation of a new Bilateral Evaluation and Dispute Resolution Office, as envisioned by Article 7.2.2 of the Phase One economic and trade agreement signed by the United States and China on January 15, 2020. This office will monitor China’s implementation of its commitments under the Phase One agreement and will be responsible for working with China’s corresponding Bilateral Evaluation and Dispute Resolution Office to address disputes that arise over implementation matters.

Ambassador Jeffrey Gerrish will serve as the “designated Deputy United States Trade Representative” heading the new Bilateral Evaluation and Dispute Resolution Office in accordance with Article 7.2.2(a) of the Phase One agreement. Interested parties may raise their concerns about implementation matters under the Phase One agreement by calling 202-395-3900.

This arrangement requires regular bilateral meetings to discuss implementation matters, with the parties meeting on a monthly basis at the “designated official” level, on a quarterly basis at the Deputy United States Trade Representative-Vice Minister level, and on a semi-annual basis at the United States Trade Representative-Vice Premier level.

Separately, the arrangement also establishes strong procedures for addressing disputes related to the agreement. A party can formally initiate a dispute by submitting an “Appeal” to the other party’s Bilateral Evaluation and Dispute Resolution Office. Consultations then take place in an attempt to resolve the dispute, first at the “designated official” level and then, if needed, at the Deputy United States Trade Representative-Vice Minister level and finally at the United States Trade Representative-Vice Premier level. If the dispute is not resolved through these consultations, the complaining party is allowed to take proportionate responsive action that it deems appropriate after providing advance notice to the party complained against. The entire dispute resolution process will take approximately 90 days. In addition, it has been expressly agreed that the complaining party in a dispute is not required to include information that could identify any company at issue or confidential business information.

The Phase One agreement entered into effect February 14, 2020. The text of that agreement can be found here.

USTR Revises $7.5 Billion Award Implementation Against EU in Airbus Case, Wool and Cashmere Sweaters and Wool Suits from the UK on List

Under President’s Trump leadership, the United States won the largest award in WTO history on October 2, 2019 when it was authorized to take countermeasures on $7.5 billion in goods after a victory in its unfair trade practices case against the European Union, France, Germany, Spain, and the United Kingdom. Pursuant to U.S. statute, the United States Trade Representative is now issuing a Notice in the Federal Register making adjustments to its WTO-authorized retaliation action, which was implemented on October 18, 2019.

Textile products of the United Kingdom described below are subject to additional import duties of 25 percent ad valorem:

HTS	Subheading Product Description
6110.11.00	Sweaters, pullovers, sweatshirts, waistcoats (vests) and similar articles, knitted or crocheted, of wool
6110.12.10	Sweaters, pullovers, sweatshirts, waistcoats (vests) and similar articles, knitted or crocheted, of Kashmir goats, wholly of cashmere
6110.20.20	Sweaters, pullovers and similar articles, knitted or crocheted, of cotton, nesoi*
6110.30.30	Sweaters, pullovers and similar articles, knitted or crocheted, of man-made fibers, nesoi
6202.99.15	Recreational performance outwear, women's/girls' anoraks, wind-breakers & similar articles, not knitted or crocheted, of other textile materials (not wool, cotton or MMF), containing <70 percent by weight of silk
6202.99.80	Women's/girls' anoraks, wind-breakers & similar articles, not knitted or crocheted, of other texile materials (not wool, cotton or MMF), containing <70% by weight of silk,
6203.11.60	Men's or boys' suits of wool, not knitted or crocheted, nesoi, of wool yarn with average fiber diameter of 18.5 micron or less
6203.11.90	Men's or boys' suits of wool or fine animal hair, not knitted or crocheted, nesoi
6203.19.30	Men's or boys' suits, of artificial fibers, nesoi, not knitted or crocheted
6203.19.90	Men's or boys' suits, of textile mats(except wool, cotton or MMF), containing under 70 percent by weight of silk or silk waste, not knit or crocheted
6208.21.00	Women's or girls' nightdresses and pajamas, not knitted or crocheted, of cotton
6211.12.40	Women's or girls' swimwear, of textile materials(except MMF), containing 70% or more by weight of silk or silk waste, not knit or crocheted
6211.12.80	Women's or girls' swimwear, of textile materials(except MMF), containing under 70% by weight of silk or silk waste, not knit or crocheted
6301.30.00	Blankets (other than electric blankets) and traveling rugs, of cotton
6301.90.00	Blankets and traveling rugs, nesoi
6302.21.50	Bed linen, not knit or crocheted, printed, of cotton, cont any embroidery, lace, braid, edging, trimming, piping or applique work, n/napped
6302.21.90	Bed linen, not knit or croc, printed, of cotton, not cont any embroidery, lace, braid, edging, trimming, piping or applique work, not napped

*

NESOI means Not Elsewhere Specified or Included.

To read the entire Notice, click here.

China 301 Update

On December 13, 2019, the Office of the U.S. Trade Representative (USTR) announced that the United States and China reached a phase-one trade deal related to the Section 301 Tariff Action: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation. USTR reported that "The United States will be maintaining 25 percent tariffs on approximately $250 billion of Chinese imports, along with 7.5 percent tariffs on approximately $120 billion of Chinese imports." See links below for additional information on the Section 301-China Tariff Action.

USTR Section 301-China webpage.

U.S. Customs and Border Protection (CBP) Section 301 HTSUS Reference Guide.

U.S. International Trade Commission (USITC) Harmonized Tariff Schedule – including supplemental China tariff information.

U.S. to Begin Imposing 25% Tariff on Certain Wool and Cashmere Apparel from the United Kingdom

In a Federal Register Notice scheduled for publication on October 18, 2019, the Office of the United States Trade Representative announces the final list of articles from the United Kingdom and certain other States of the European Union to be subject to additional Section 301 tariffs relating to the Large Civil Aircraft Dispute.

On October 2, 2019, The United States won the largest arbitration award in World Trade Organization history in its dispute with the European Union over illegal subsidies to Airbus. This follows four previous panel and appellate reports from 2011-2018 finding that EU subsidies to Airbus break WTO rules. This decision demonstrates that massive EU corporate welfare has cost American aerospace companies hundreds of billions of dollars in lost revenue over the nearly 15 years of litigation.

The tariffs will be applied to a range of imports from EU Member States, with the bulk of the tariffs being applied to imports from France, Germany, Spain, and the United Kingdom – the four countries responsible for the illegal subsidies. Although USTR has the authority to apply a 100 percent tariff on affected products, at this time the tariff increases will be limited to 10 percent on large civil aircraft and 25 percent on agricultural and other products. The U.S. has the authority to increase the tariffs at any time, or change the products affected. The articles covered by the additional tariffs vary from country to country. The only country subject to additional tariffs on textile articles is the United Kingdom.

Products of the United Kingdom described below are subject to additional import duties of 25 percent ad valorem.

6110.12.10	Sweaters, pullovers, sweatshirts, waistcoats (vests) and similar articles, knitted or crocheted, of Kashmir goats, wholly of cashmere
6110.20.20	Sweaters, pullovers and similar articles, knitted or crocheted, of cotton, nesoi
6110.30.30	Sweaters, pullovers and similar articles, knitted or crocheted, of manmade fibers, nesoi
6202.99.15	Rec perf outwear, women's/girls' anoraks, wind-breakers & similar articles, not k/c, tex mats (not wool, cotton or mmf), cont < 70% by wt of silk
6202.99.80	Women's orgirls' anoraks, wind-breakers & similar articles, not k/c, of tex mats (not wool, cotton or mmf), cont < 70% by wt of silk
6203.11.60	Men's or boys' suits of wool, not knitted or crocheted, nesoi, of wool yarn with average fiber diameter of 18.5 micron or less
6203.11.90	Men's or boys' suits of wool or fine animal hair, not knitted or crocheted, nesoi
6203.19.30	Men's or boys' suits, of artificial fibers, nesoi, not knitted or crocheted
6203.19.90	Men's or boys' suits, of textile mats(except wool, cotton or mmf), containing under 70% by weight of silk or silk waste, not knit or croch
6208.21.00	Women's or girls' nightdresses and pajamas, not knitted or crocheted, of cotton
6211.12.40	Women's or girls' swimwear, of textile materials(except mmf), containing 70% or more by weight of silk or silk waste, not knit or crocheted
6211.12.80	Women's or girls' swimwear, of textile materials(except mmf), containing under 70% by weight of silk or silk waste, not knit or crocheted
6301.30.00	Blankets (other than electric blankets) and traveling rugs, of cotton
6301.90.00	Blankets and traveling rugs, nesoi
6302.21.50	Bed linen, not knit or crocheted, printed, of cotton, cont any embroidery, lace, braid, edging, trimming, piping or applique work, not napped
6302.21.90	Bed linen, not knit or croc, printed, of cotton, not cont any embroidery, lace, braid, edging, trimming, piping or applique work, not napped

The effective date of the additional duties is October 18, 2019.

The award of $7.5 billion annually is by far the largest award in WTO history—nearly twice the largest previous award. The Arbitrator calculated this amount based on WTO findings that EU launch aid for Airbus is causing significant lost sales of Boeing large civil aircraft, as well as impeding exports of Boeing large aircraft to the EU, Australia, China, Korea, Singapore, and UAE markets. Under WTO rules, the Arbitrator’s decision is final and not subject to appeal.

U.S. to Impose 25% Tariff on Cashmere Sweaters and Wool Suits from the United Kingdom

On October 2, 2019, The United States won the largest arbitration award in World Trade Organization history in its dispute with the European Union over illegal subsidies to Airbus. This follows four previous panel and appellate reports from 2011-2018 finding that EU subsidies to Airbus break WTO rules. This decision demonstrates that massive EU corporate welfare has cost American aerospace companies hundreds of billions of dollars in lost revenue over the nearly 15 years of litigation.

The tariffs will be applied to a range of imports from EU Member States, with the bulk of the tariffs being applied to imports from France, Germany, Spain, and the United Kingdom – the four countries responsible for the illegal subsidies. Although USTR has the authority to apply a 100 percent tariff on affected products, at this time the tariff increases will be limited to 10 percent on large civil aircraft and 25 percent on agricultural and other products. The U.S. has the authority to increase the tariffs at any time, or change the products affected. The articles covered by the additional tariffs vary from country to country. The only country subject to additional tariffs on textile articles is the United Kingdom.

Products of the United Kingdom described below are subject to additional import duties of 25 percent ad valorem.

6110.12.10	Sweaters, pullovers, sweatshirts, waistcoats (vests) and similar articles, knitted or crocheted, of Kashmir goats, wholly of cashmere
6110.20.20	Sweaters, pullovers and similar articles, knitted or crocheted, of cotton, nesoi
6110.30.30	Sweaters, pullovers and similar articles, knitted or crocheted, of manmade fibers, nesoi
6202.99.15	Rec perf outwear, women's/girls' anoraks, wind-breakers & similar articles, not k/c, tex mats (not wool, cotton or mmf), cont < 70% by wt of silk
6202.99.80	Women's orgirls' anoraks, wind-breakers & similar articles, not k/c, of tex mats (not wool, cotton or mmf), cont < 70% by wt of silk
6203.11.60	Men's or boys' suits of wool, not knitted or crocheted, nesoi, of wool yarn with average fiber diameter of 18.5 micron or less
6203.11.90	Men's or boys' suits of wool or fine animal hair, not knitted or crocheted, nesoi
6203.19.30	Men's or boys' suits, of artificial fibers, nesoi, not knitted or crocheted
6203.19.90	Men's or boys' suits, of textile mats(except wool, cotton or mmf), containing under 70% by weight of silk or silk waste, not knit or croch
6208.21.00	Women's or girls' nightdresses and pajamas, not knitted or crocheted, of cotton
6211.12.40	Women's or girls' swimwear, of textile materials(except mmf), containing 70% or more by weight of silk or silk waste, not knit or crocheted
6211.12.80	Women's or girls' swimwear, of textile materials(except mmf), containing under 70% by weight of silk or silk waste, not knit or crocheted
6301.30.00	Blankets (other than electric blankets) and traveling rugs, of cotton
6301.90.00	Blankets and traveling rugs, nesoi
6302.21.50	Bed linen, not knit or crocheted, printed, of cotton, cont any embroidery, lace, braid, edging, trimming, piping or applique work, not napped
6302.21.90	Bed linen, not knit or croc, printed, of cotton, not cont any embroidery, lace, braid, edging, trimming, piping or applique work, not napped

The effective date of the additional duties is October 18, 2019.

For the complete list of articles the U.S. will be imposing additional duties on CLICK HERE.

The award of $7.5 billion annually is by far the largest award in WTO history—nearly twice the largest previous award. The Arbitrator calculated this amount based on WTO findings that EU launch aid for Airbus is causing significant lost sales of Boeing large civil aircraft, as well as impeding exports of Boeing large aircraft to the EU, Australia, China, Korea, Singapore, and UAE markets. Under WTO rules, the Arbitrator’s decision is final and not subject to appeal.

WTO Boeing: The Commission seeks input regarding the EU's economic interests in accordance with Article 9 of Regulation (EU) No 654/2014 of the European Parliament and of the Council

The Commission has launched a public consultation to seek information and views regarding the EU's economic interests in accordance with Article 9 of Regulation (EU) No 654/2014 of the European Parliament and of the Council of 15 May 2014. The Commission expects to receive input from private stakeholders potentially affected by planned EU commercial policy measures further to adjudication of a trade dispute with the United States on Measures Affecting Trade in Large Civil Aircraft under the WTO Dispute Settlement Understanding (“DSU”).

The public consultation will last until 31 May 2019. Four tariff lines relating to cotton are on the list:

• 52010090 cotton, neither carded nor combed (excl. rendered absorbent or bleached),
• 52029100 garnetted stock of cotton,
• 52029900 cotton waste (excl. yarn waste, thread waste and garnetted stock), and
• 52030000 cotton, carded or combed.

Additionally, the list includes textile bandages and luggage and travel goods with a textile exterior.

READ MORE HERE

USTR Robert Lighthizer Statement on the Canadian WTO Challenge to Trade Remedies

On January 10, 2018, U.S. Trade Representative Robert Lighthizer issued the following statement in regard to the case filed by Canada with the World Trade Organization (WTO) against U.S. disciplinary practices and procedures:

“Canada’s new request for consultations at the WTO is a broad and ill-advised attack on the U.S. trade remedies system. U.S. trade remedies ensure that trade is fair by counteracting dumping or subsidies that are injuring U.S. workers, farmers, and manufacturers. Canada’s claims are unfounded and could only lower U.S. confidence that Canada is committed to mutually beneficial trade.

“Canada is acting against its own workers’ and businesses’ interests. Even if Canada succeeded on these groundless claims, other countries would primarily benefit, not Canada. For example, if the U.S. removed the orders listed in Canada’s complaint, the flood of imports from China and other countries would negatively impact billions of dollars in Canadian exports to the United States, including nearly $9 billion in exports of steel and aluminum products and more than $2.5 billion in exports of wood and paper products. Canada’s claims threaten the ability of all countries to defend their workers against unfair trade. Canada’s complaint is bad for Canada.”

20-Year Old US-EU Beef Threatens Duty Increase for Certain Rayon Fiber and Yarn

The EU bans the import of beef and beef products produced from animals to which any of six hormones have been administered for growth-promotion purposes. The effect of the EU ban is to prohibit the import of all but specially-produced U.S. beef and beef products. In February 1998, the WTO Dispute Settlement Body (DSB) in the EU-Beef case found that the ban was inconsistent with the obligations of the European Communities (now the EU) under the WTO Agreement. In July 1999, a WTO arbitrator determined that the EU import ban on U.S. beef and beef products had nullified or impaired U.S. benefits under the WTO Agreement in the amount of $116.8 million each year. On July 26, 1999, the DSB authorized the United States to suspend the application to the EU, and member States thereof, of WTO tariff concessions and related obligations covering trade in an amount of $116.8 million per year. Pursuant to that authorization, USTR announced a list of EU products that would be subject to a 100 percent rate of duty effective with respect to products entered, or withdrawn from warehouse, for consumption on or after July 29, 1999. See 64 FR 40638.

On May 13, 2009, the United States and the European Commission announced the signing of a Memorandum of Understanding (MOU) in the EU-Beef case. See 74 FR 40864.

The MOU provided for the EU to make phased increases in market access by adopting a tariff-rate quota (TRQ) for beef produced without growth-promoting hormones (termed HQB products), in return for the United States making phased reductions in additional duties the United States had imposed consistent with WTO authorization. See 74 FR 40864. Both in accordance with the MOU and as a result of a decision of the United States Court of Appeals for the Federal Circuit, USTR terminated all additional duties on EU products, effective May 2011. See 76 FR 30987.

Under the second phase of the MOU, starting in August 2012, the EU increased the TRQ to 45,000 metric tons (MT). Although the EU has maintained this 45,000 MT TRQ for HQB products, it has not in practice provided benefits to the U.S. beef industry sufficient to compensate for the economic harm resulting from the EU ban on all but specially-produced U.S. beef. In particular, non-U.S. exporters of HQB products have been able to fill a substantial part of the 45,000 MT TRQ.

In February 2016, Congress passed and the President signed the Trade Facilitation and Trade Enforcement Act of 2015. Among other things, the Act amended relevant provisions of the 1974 Trade Act to confirm that the Trade Representative may reinstate a previously terminated Section 301 action in order to exercise a WTO authorization to suspend trade concessions. In particular, the new Section 306(c) of the 1974 Trade Act permits the Trade Representative to reinstate a Section 301 action following (1) a request from the petitioner or any representative of the domestic industry that would benefit from reinstatement of action, (2) consultations under Section 306(d) of the Trade Act, and (3) a review under section 307(c) of the Trade Act.

On December 9, 2016, representatives of the U.S. beef industry invoked the new Section 306(c) of the 1974 Trade Act by filing a written request for reinstatement of action.

In order to assist in a possible reinstatement of the action in accordance with Section 306(c) of the 1974 Trade Act, and to provide information in connection with a review under Section 307(c) of the Act, the Section 301 Committee seeks public comments with respect to the specific EU products on the lists for increased import duties.

The list of products potential subject to increased duty is lengthy and includes two textile products:

• Viscose rayon staple fibers, not carded, combed or otherwise processed for spinning, provided for in Subheading 5504.10.00 HTSUS, rate of duty 4.3%.

• Single yarn (other than sewing thread) containing 85% or more by weight of artificial staple fibers, not put up for retail sale, provided for in Subheading 5510.11.00 HTSUS, rate of duty 9%.

In the case of the fiber classified at 5504.10.00, total U.S. imports in 2015 were $174 million, of which imports from the EU were:

• Germany, $40 million
• Austria, $30 million
• United Kingdom, $260,000
• Czech Republic, $17,000
• Netherlands, $2,000
• Spain, $2,000

NOTE, that this fiber is the subject of several temporary duty suspension petitions recently filed as part of the new Miscellaneous Tariff Bill process and was formerly under duty suspensions.

In the case of the yarn classified at 5510.11.00, total U.S. imports in 2015 were $41 million, of which imports from the EU were:

• Spain, $700,000
• Belgium, $410,000
• Switzerland, $151,000
• Austria, $96,000
• Slovenia, $23,000
• France, $16,000
• United Kingdom, $6,000

Comments are due by Monday, January 30, 2017. There will be a hearing in Washington on Wednesday, February 15, 2017.

To see the full text of the Federal Register notice CLICK HERE

United States Launches Challenge to Extensive Chinese Export Subsidy Program

United States Trade Representative Michael Froman announced today that the United States has pursued dispute settlement consultations with the Government of China at the World Trade Organization ("WTO") concerning China’s "Demonstration Bases-Common Service Platform" export subsidy program. Under this questionable program, China seems to provide prohibited export subsidies through "Common Service Platforms" to manufacturers and producers across seven economic sectors and dozens of sub-sectors located in more than one hundred and fifty industrial clusters throughout China known as "Demonstration Bases." This unfair Chinese program is harmful to American workers and American businesses of all sizes.

Pursuant to the Demonstration Bases-Common Service Platform program, China provides free and discounted services through "Common Service Platforms" as well as cash grants and other incentives to enterprises that meet export performance criteria and are located in 179 Demonstration Bases throughout China. Each of these Demonstration Bases is comprised of enterprises from one of seven sectors:

1. textiles, apparel and footwear;
2. advanced materials and metals (including specialty steel, titanium and aluminum products);
3. light industry;
4. specialty chemicals;
5. medical products;
6. hardware and building materials; and
7. agriculture.

China maintains and operates this extensive program through over 150 central government and sub-central government measures throughout China.

Consultations are the first step in the WTO dispute settlement process. If the United States and China are not able to reach a mutually agreed solution through consultations, the United States may request the establishment of a WTO dispute settlement panel.