On 23 June 2020, the United States Trade Representative (USTR) announced a revised list of European Union products that will be subject to punitive tariffs in the United States. The revision will introduce a carousel mechanism so that different products will always be subject to duties. The USTR is considering tariffs of up to 100% on 395 new products, as well as possible increases in current tariffs.

The US and EU have an ongoing dispute over subsidies granted by the EU and Germany, France, Spain and the United Kingdom (UK) for the manufacture of aircrafts. The US filed a complaint in 2004, which found the subsidies to be illegal and was upheld. As a result, the US imposed an additional 10% duty on aircraft imports from France, Germany, Spain and the UK.

The US also imposed a 25% penalty duty on more than 150 different products from certain EU countries. The measures were divided into 16 parts, with each section containing a list of products originating in certain UK and/or EU Member States.

In February 2020, the USTR announced proposed changes to the list of products subject to punitive tariffs. While the initially proposed list was very extensive and covered products such as sparkling wine, luxury handbags, olive oil, helicopters and motorbikes, the USTR made only minor changes to the products subject to punitive duties.

Penalty duties imposed by the USA on new German products

On 23 June 2020, the USTR announced plans to further amend the list of EU products subject to punitive tariffs. This periodic revision of the product list is known as the “carousel mechanism” and puts pressure on trading partners by continuously disrupting various industries. Accordingly, there are now three annexes, which outline the duties to be paid:

The main products listed in Annex III include:

The FRN set a deadline of 26 July 2020 for submission of comments, with specific aspects for each annex open for comment. The information requested by the USTR regarding each annex is as follows:

Exporters to the US should take action

To date, the US has imposed tariffs on only about half of the WTO-approved value, so amendments to the current product list could be significant.

Emergency measures that companies should consider are:

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