The United States reported that it will apply the carousel mechanism to collect tariffs on new products as part of the retaliation against the European Union (EU) for the case of the use of prohibited subsidies to the Airbus company.
Thus, the Office of the United States Trade Representative (USTR) will modify the list of 7.5 billion dollars in European goods subject to retaliatory tariffs.
In 2018, the World Trade Organization (WTO) issued a final decision in favor of the United States, confirming a 2016 decision in which the EU had not eliminated illegal state aid to Airbus.
Early last year, the WTO Appellate Body ruled that the United States had also failed to comply with a previous WTO ruling to address US subsidies through tax breaks.
The WTO has yet to estimate the damage caused to the EU by the WTO-inconsistent US subsidies and authorize any EU countermeasures.
The WTO authorized the United States to retaliate because EU member states have failed to take action on six subsidies that were deemed inconsistent with multilateral trade rules.
For its part, the USTR received 24,000 comments on possible changes to tariffs against the EU.
The USTR is delisting certain products from Greece and the UK and adding an equivalent amount of trade from France and Germany.
The changes are modest; the number of products subject to countermeasures will remain unchanged at $ 7.5 billion and tariff rates will remain unchanged at 15% for aircraft and 25% for all other products.
“The EU and the member states have not taken the necessary actions to comply with the decisions of the WTO,” said Ambassador Robert Lighthizer.
“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 remedies the conduct that harmed the aviation industry and American workers and will ensure a level playing field for American companies, ”he added.
The details of the modification are set out in a Notice to be published in the Federal Register.