On Wednesday October 2, the Office of the United States Trade Representative (USTR) announced that the U.S. received approval from the World Trade Organization (WTO) to impose tariffs on $7.5 billion of selected EU products, as result of its win in a long-running case against illegal EU aircraft subsidies.
Effective October 18, 2019 USTR will impose a 25% tariff rate increase on the following EU agricultural goods that may have relevance for WG members:
- Cherries, otherwise prepared or preserved, nesoi
- Cherries, provisionally preserved, but unsuitable in that state for immediate consumption
- Cherries, dried
- Peaches (excluding nectarines), otherwise prepared or preserved, not elsewhere specified or included
- Pears, otherwise prepared or preserved, nesoi
- Oranges, fresh or dried
- Mandarins and other similar citrus hybrids including tangerines, satsumas, clementines, wilkings, fresh or dried
- Clementines, fresh or dried, other
- Lemons, fresh or dried
- Olives, green, not pitted, in saline, not ripe
- Olives, green, in a saline solution, pitted or stuffed, not place packed
- Olives, n/pitted, green, in saline sol., in contain. > 8 kg, drained wt, for repacking or sale, subject to add. US note 5 to Ch. 7
- Olives, n/pitted, green, in saline sol., in contain. > 8 kg, drained wt, for repacking or sale, not subject to add. US note 5 to Ch. 7
- Olives, n/pitted, nesoi
- Olives, pitted or stuffed, provisionally preserved but unsuitable in that state for immediate consumption
- Olives, green, not pitted, in saline, not ripe, in containers holding o/8 kg for repkg, not subject to add. US note 4 to Ch. 20
- Olives, green, in saline, place packed, stuffed, in containers holding n/o 1 kg, aggregate quantity n/o 2700 m ton/yr
- Olives, green, in saline, place packed, stuffed, not in containers holding 1 kg or less
- Olive oil, other than virgin olive oil, and its fractions, not chemically modified, weighing with the immediate container under 18 kg
- Virgin olive oil and its fractions, whether or not refined, not chemically modified, weighing with the immediate container under 18 kg
- Wine other than Tokay (not carbonated), not over 14% alcohol, in containers not over 2 liters
Per USTR’s notification, it will have the authority to increase the tariffs “at any time” or change the products affected. Although the EU is not allowed to retaliate against WTO-authorized countermeasures, EU officials have already been publicly stating that they will likely retaliate to these tariffs through other channels. Ultimately, U.S. officials hope that the imposition of tariffs will compel the EU to negotiate and produce a settlement that will address the ongoing aircraft subsidy problem for good.
It is important to note that this tariff increase is separate from the Section 232 tariffs imposed by the Department of Commerce on European steel and aluminum in spring 2018, as well as separate from the threatened Section 232 tariffs on autos and auto parts (which have not yet been imposed). In these instances, the EU has also threatened retaliation on U.S. imports, although no fresh produce items are yet included on the target list.
Of all ag products exported to the EU, tree nuts ranked second, with almond, walnut, and pistachio exports alone totaling roughly $2.5 billion of the total $13.5 billion in ag trade. The EU also ranks as a top 5 market for certain citrus, onions, garlic, grapefruit, dates, blueberries, and asparagus.
Western Growers continues to closely track these and other trade conflict-related tariff rate fluctuations and is available to help answer questions. Please contact Tracey Chow at 202-296-0191 for more information.
