On The Hill

 

On Wednesday (Jul. 29), U.S. trade officials said they could not “take seriously” the announcement by Airbus and the European Union (EU) that it had resolved the subsidies in question in a World Trade Organization (WTO) dispute over large civil aircraft.^[1]

 

“USTR is aware of press reports on this matter, but we have not been contacted by the EU or any of the relevant member countries regarding actions they claim to have taken to come into compliance with WTO rulings on the illegal subsidies provided to Airbus,” United States Trade Representative (USTR) spokesperson Jeff Emerson said.

 

The U.S. said neither it nor the WTO had received details from the EU regarding its announcement that terms for “launch aid” loans granted by the governments of France and Spain to Airbus have been modified to reflect market conditions.^[2]

 

USTR is expected to announce by Aug. 12 whether it will increase or alter current retaliatory duties on $7.5 billion of European goods, including aircraft, wine, and cheeses.

 

The EU and Airbus have said the U.S. no longer had any reason to impose its retaliatory duties and should work with the bloc toward a final negotiated solution to the dispute.

 

EU Trade Commissioner Phil Hogan said on Thursday (Jul. 30) that more progress has been made in 2020 in the Airbus-Boeing subsidies dispute than in the previous 15 years. He recognized the disparate views of compliance but emphasized his hope that the EU’s latest action would lead to a resolution.^[3] 

 

 

 

A bipartisan group of more than 160 House lawmakers urged USTR Robert Lighthizer to remove retaliatory duties on European wine, whiskey, and food products that were imposed due to the Airbus/Boeing dispute.

 

Rather than lift the retaliatory duties entirely, lawmakers urged USTR to rotate in a new set of European products subject to the tariffs. USTR has imposed a 15 percent duty on Airbus aircraft and a 25 percent duty on all other goods on the list.^[4]

 

U.S. restaurants, wine sellers, and others say the tariffs have hit the industry hard, especially due to the COVID-19 pandemic. USTR is currently conducting a review of whether to change its retaliation list under a mandate provision known as the “carousel.”

 

“Additional duties on imported wine, spirits, and food products like fruit, pork, and olive oil cut into their already tight profit margins, further threatening the survival of these industries and the many jobs they support,” lawmakers said. “We urge you to make changes that include taking a targeted approach and removing duties on food and drink products.”

 

To view the House letter, click here.

 

 

 

On Monday (Jul. 27), the Senate Republicans released the Health, Economic Assistance, Liability Protection, and Schools (HEALS) Act in a variety of outlines and bills.

 

Senator Lindsey Graham’s (R-SC) legislation to provide tax credits and incentives to move the production of Personal Protective Equipment (PPE) from China back to the U.S. was included in the package.

 

Graham’s bill, the Restoring Critical Supply Chains and Intellectual Property Act, includes language that requires: PPE, such as clothing, sanitizing supplies, ancillary medical supplies, and other textile equipment be grown, reprocessed, reused, or produced in the U.S.; the Department of Health and Human Services (HHS) to immediately begin increasing procurements of domestic PPE for the Strategic National Stockpile (SNS) incrementally and reach 100 percent domestic sourcing as soon as practicable within five years; HHS to submit a plan to Congress within 90 days detailing how they will reach 50 percent domestic sourcing in one year, 75 percent in 18 months, and 100 percent in two years; and the establishment of a $7.5 billion medical manufacturing project tax credit to build out and retrofit factories to meet increased PPE demand.

 

To view Graham’s bill, click here.

 

Separately, the HEALS Act includes the American Mineral Security Act, which would identify critical minerals and ensure timely surveying of domestic supply chains. The bill would direct the Secretary of Energy to execute a program to develop advanced separation of technologies for the recovery of rare earth elements and other minerals. The secretary would then submit a report to Congress on the effectiveness of such a program within one year of its enactment.

 

To view the American Mineral Security Act, click here.

 

 

 

On Thursday (Jul. 30), the U.S. International Trade Commission (ITC) voted to unanimously impose tariffs on wind and energy towers from Canada, Indonesia, South Korea, and Vietnam.

 

The five-member commission ruled that imports from those countries are unfairly undermining U.S. producers because they are sold at less than market value or are subsidized by their home government.^[5]

 

The commission said imports from South Korea, Vietnam, and Indonesia would not be subject to retroactive tariffs because they did not fit the criteria of “critical circumstances,” a measure of whether imports surged recently in anticipation of tariffs. However, the countries will still face duties going forward.

 

The ITC will post a full report on the anti-dumping investigation on Sep. 2, 2020.

 

 

 

^[1] Palmer, Doug. “U.S. says it can’t take latest Airbus subsidy move seriously.” Politico Pro, 29 Jul. 2020. https://link.edgepilot.com/s/cb4db415/zqQNS2lF50m7IBpYu3oT2w?u=https://subscriber.politicopro.com/article/2020/07/us-says-cant-take-latest-airbus-subsidy-move-seriously-3982875

 

^[2] “U.S. blasts EU compliance effort on Airbus at WTO.” Inside U.S. Trade, 29 Jul. 2020. https://link.edgepilot.com/s/b32f1e87/PBybauYHsUu2wfGfb1_4xw?u=https://insidetrade.com/daily-news/us-blasts-eu-compliance-effort-airbus-wto

 

^[3] “Hogan: EU hopes Airbus compliance a ‘breakthrough’ in WTO dispute.” Inside U.S. Trade, 30 Jul. 2020. https://link.edgepilot.com/s/cde233b3/f9C9SXP1y0qYfWn91sjbCQ?u=https://insidetrade.com/daily-news/hogan-eu-hopes-airbus-compliance-%25E2%2580%2598breakthrough%25E2%2580%2599-wto-dispute

 

^[4] Palmer, Doug. “House lawmakers urge USTR drop duties on EU wine, food products.” Politico Pro, 29 Jul. 2020. https://link.edgepilot.com/s/3e2b8a1a/Fxh2MDIl0EWEX6I5c2gQ-Q?u=https://subscriber.politicopro.com/article/2020/07/house-lawmakers-urge-ustr-drop-duties-on-eu-wine-food-products-3982896

 

^[5] Bade, Gavin. “U.S. imposes tariffs on wind energy towers from Canada, 3 other nations.” Politico Pro, 30 Jul. 2020. https://link.edgepilot.com/s/2d09d4ab/P7Zi4yWTJEyUZHbvU6FvJw?u=https://subscriber.politicopro.com/article/2020/07/us-itc-votes-to-impose-tariffs-on-wind-energy-towers-from-four-nations-1971612