The Office of the U.S. Trade Representative (USTR) took additional steps last Friday to resolve the World Trade Organization (WTO) dispute regarding the European Union’s (EU) continued use of subsidies for large civil aircraft. In a Federal Register notice, USTR proposed more retaliatory tariffs totaling $4 billion on EU products, including dairy, because the EU has yet to remove the subsidies.

Last May, the WTO found that EU subsidies for Airbus airplanes had adversely affected U.S. airplane manufacturers and that the United States was entitled to retaliate under WTO’s dispute-settlement system. In April, USTR proposed retaliatory tariffs totaling $11.2 billion because it estimated that the EU subsidies cost the United States $11 billion in trade each year. The newly proposed tariffs for EU products, including cultured products, butter, dairy spreads, cheeses and whey protein concentrate, would be added to the $11.2 billion.

Comments and Hearing

USTR is seeking comments on the additional tariffs and will hold a public hearing on August 5 for oral comments. The deadline for submitting a request to appear at the hearing is July 24. Written comments are due August 5.

In earlier comments to USTR, IDFA said the escalation of tariffs with U.S. trading partners is creating uncertainty in the market and causing U.S. companies to lose market share. Noting that it supports U.S. rights to retaliate against the EU’s illegal subsidies, IDFA said establishing a comprehensive trade agreement between the two countries would be the best solution for U.S. agriculture and the dairy industry. 

• “USTR Proposes Retaliatory Tariffs for EU Products, Including Dairy"

• "In Comments to USTR, IDFA Stresses Trade Pact, Not Tariffs, Best Solution for Dispute with EU”

For more information, contact Beth Hughes, IDFA senior director of international trade, at bhughes@idfa.org.