EU Tariffs: Airbus Case & DST Updates

As we advised last week, the USTR has published federal register notices in regards to the above two issues. As there are many questions surrounding the process, we wanted to try to clarify as much as possible.

Airbus case retaliatory tariffs on EU products:

We reported that the USTR is not satisfied with the actions of Airbus after the WTO ruling on subsidies. This opened the door to review the current list of targeted items and potentially add items or increase tariffs. The USTR is not citing the legal authority for this action thus we are not clear if this is the standard carousel process that consists of a review of tariffs after 120 days of implementation and then subsequent reviews every 180 days or if this is more of an ad-hoc review which is allowed under Section 307 authority. The reality is that with the public comment period open until Jan 13 and then further review by USTR and publishing of final results, we will probably be at or near the first carousel date of February 15.

DST/Digital Service Tax: 

The Trump administration has deemed the new DST in France as harmful to USA tech companies and has proposed another Section 301 action and retaliatory tariffs of 100% on a list of French products, including champagne and sparkling wine. Similar to the Airbus situation, we do not feel industries unrelated to the industry being hurt should be targeted and we will work with other associations to fight this. The public comment period is open on this issue until January 6. Should you want to attend the hearing scheduled for January 7, you must submit a written request by December 30. Let us know if you need any further information on the dates or process. With subsequent review and publication of the ruling, we do not expect to see an impact until February.

For both of these issues, your voice is important and specific data as to how the tariffs are hurting your business or how new tariffs would impact you is important to provide to your congressional representatives. You can send to us and we will compile for submission via our coalition letters or you can send directly to your representatives.

Bottom line, if you want to try to rush inventory in prior to the potential changes, start preparing to ship as soon as possible.

We will keep you posted as to all developments