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USTR Announces No Revisions in Airbus Tariffs: Is the Tumbler, Goblet, and Pint Half-empty or Half-full?

NEWS RELEASE

 

The Office of the United States Trade Representative (USTR) announced in a Notice for publication in the Federal Register on February 12, 2021, that it would propose no revisions to the existing retaliatory tariffs on goods from the EU in the Airbus trade dispute. USTR cited a statutory exception to holding the upcoming Review of Action required this month because USTR “and the U.S. industry affected by the non-compliance with the DSB recommendation agree that a revision is unnecessary.” Citing the revisions in January 2021 of additional products from France and Germany, USTR said it will “continue to consider the action taken in this investigation.” In other words, USTR is “in a holding pattern” in this aircraft dispute.

 

The National Association of Beverage Importers (NABI) is appreciative of the USTR decision here not to increase and expand the financial damages suffered by importers of wine and distilled spirits (and the threaten tariffs on beer) who are in no way connected with this aerospace trade dispute. In reality, this was the expected as the minimum outcome in order to reflect the declared trade policy of the Biden/Harris Administration to rebuild trust and confidence with the traditional trading partners and allies of the United States. Any increase in the Airbus tariffs would have negated that clear message. In other words, the glass is half empty. USTR and the Biden/Harris Administration could and should have done more to signal optimism from a glass being half full.

 

“A missed opportunity to present a conciliatory signal, particularly in response to the European Commission’s offer of a six-month mutual suspension of the Airbus and Boeing tariffs,” said Robert M. Tobiassen, NABI President. USTR had before it, Tobiassen said “the options of repealing the January additional tariffed products or agreeing with the EU for a mutual six-month suspension of the Airbus and Boeing tariffs with the added ask of a suspension by the EU of the doubling of the Steel and Aluminum retaliatory tariffs imposed by the EU. A suspension is not a repeal so domestic interests on both sides of the Atlantic Ocean would realize the Biden/Harris Administration and European Commission are not rolling back their WTO approved trade sanctions.” Addition of an EU suspension of the doubling of the tariffs helps to equalize the large civil aircraft suspension of $7.5 billion in volume of trade in the Airbus case compared to the approximately $4.0 billion in volume of trade in the Boeing case. “Building trust and confidence is a step-by-step process” said Tobiassen, “and these small steps would build good will thereby creating a more positive feeling during settlement negotiations.”

 

The damage and devasting impact of the Airbus tariffs to the U.S. importer industry, distribution and retail tiers, and importantly the hospitality sector continues to be immense in job losses and furloughs by warehouse and port workers, transportation drivers, logistics and marketing staff, servers and other wait staff, chefs, bartenders, and janitors, among so many others. Tobiassen said “My members ask why does USTR not care about us as an ‘affected industry’ and let the aerospace industry decided whether we should continue to be devasted? The only link between aircraft and beverage alcohol is the fact you can purchase a drink on your flight.”

 

“We know there is great interest in resolving the Boeing-Airbus dispute on both sides of the Atlantic and USTR looks forward to working with our European allies to find an outcome that levels the playing field once Ambassador Tai is confirmed,” USTR spokesman Adam Hodge said yesterday. “With USTR ‘in a holding pattern,’ let’s hope Ms. Tai’s confirmation is soon and smooth so USTR can start to rebuild our European trading relationships and repair and eliminate the devasting financial damage to local companies, workers, and communities inflicted by these tariffs. A mutual suspension of the Airbus and Boeing tariffs would be a great first step,” said Tobiassen.

 

For further information, please contact NABI at (202) 393-6224 or nabipresident@bevimporters.org