The US government on Monday said that it would begin collecting new duties on aircraft parts and other products from France and Germany from yesterday after failing to resolve a 16-year dispute over aircraft subsidies with the EU.
In a notice to shippers late on Monday, US Customs and Border Protection said that the duties would apply from 12:01am yesterday as part of the long-running battle over government subsidies to Europe’s Airbus SE and its US rival, Boeing Co.
The notice follows an announcement by the Office of the US Trade Representative (USTR), which said that it would impose an additional 15 percent tariff on aircraft parts, including fuselage and wing assemblies, and a 25 percent duty on certain wines.
Talks between Washington and Brussels to end the battle stalled in the final weeks of US President Donald Trump’s administration, a European source familiar with the matter said.
Washington had also pressed to reach a separate solution with Britain, which has a share in Airbus, but has exited the EU.
Brussels said that it would seek swift resolution of the issue with US president-elect Joe Biden, who takes office on Jan. 20.
The Biden team had no immediate comment on the tariff issue.
Washington and Brussels have won cases at the WTO, the former allowed to impose tariffs on US$7.5 billion of EU goods and the latter extra duties on US$4 billion of imports from the US.
Airbus said that the USTR’s expansion of tariffs to include aircraft components made in France and Germany was “counterproductive” and would wind up harming US workers at its site in Mobile, Alabama, where it assembles A320 and A220 aircraft.
The measure is to hit A320 production, which uses components from France and Germany, while the A220 production does not, an Airbus spokesman said.
Airbus delivered more than 40 planes of the A320 family from Mobile last year, but the number would be lower this year due to the COVID-19 pandemic, the spokesman said.
The initial effects might be muted since aerospace companies generally procure large components such as wings and fuselages well in advance to ensure smooth production flows.
Aircraft were covered by US tariffs, but the addition of components closed a loophole that had allowed Airbus planes assembled in Mobile to be sold in the US free of tariffs.
Unless the issue is resolved quickly, those aircraft are likely to be uncompetitive in the US market.
Some alcohol from the Airbus-producing nations — France, Germany, Spain and Britain — had been subject to tariffs, but new varieties are now affected.
The French wine exporters’ federation called it a “sledgehammer” blow.
Unlike previous short-notice tariff actions, the USTR did not grant any exclusions for products in transit or “on the water,” US Wine Trade Alliance president Ben Aneff said, calling the decision “deeply unfair.”
Aneff urged US Trade Representative Robert Lighthizer in a letter on Monday to amend the action to exempt goods in transit when the tariffs were announced less than two weeks ago on Dec. 30, noting that ocean transit can take 22 to 40 days.
Aneff said the move would hit many US businesses in the hospitality, restaurant and wine industry with sharply higher costs at a time when they are being hammered by pandemic-related closures.
From India to China to the US, automakers cannot make vehicles — not that no one wants any, but because a more than US$450 billion industry for semiconductors got blindsided. How did both sides end up here? Over the past two weeks, automakers across the world have bemoaned the shortage of chips. Germany’s Audi, owned by Volkswagen AG, would delay making some of its high-end vehicles because of what chief executive officer Markus Duesmann called a “massive” shortfall in an interview with the Financial Times. The firm has furloughed more than 10,000 workers and reined in production. That is a further blow
MOBILE SMART: The Dimensity 1200 is 22 percent better in terms of performance than its predecessor, and 25 percent more power-efficient, the handset chip designer said MediaTek Inc (聯發科) yesterday unveiled its premium 5G processors — the Dimensity 1200 and Dimensity 1100 — as it vies for a larger slice of the world’s rapidly growing 5G smartphone market. Manufactured using Taiwan Semiconductor Manufacturing Co’s (台積電) 6-nanometer process technology, the Dimensity 1200 processor performs 22 percent better than the previous generation Dimensity 1000+ processor, and is 25 percent more power-efficient, MediaTek said. Chinese smartphone brands Xiaomi Corp (小米) and Realme Mobile Telecommunications (Shenzhen) Co (銳爾覓移動通信) are to be the first adopters of the latest Dimensity chips, the companies said during a virtual media briefing. Xiaomi plans to equip its first
Answering to a reported request by Germany to help address a chip shortage in its auto industry, the Ministry of Economic Affairs (MOEA) yesterday said that it was in talks with domestic chip suppliers. Foreign media over the weekend reported that German Minister of Economic Affairs Peter Altmaier had sent a request to Taipei to ask Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to cooperate more closely with German automakers to provide microchips and sensors, to bridge a shortage that has emerged over the past few months. The MOEA said that it had not yet received the request and could therefore not elaborate
FOCUS ON FOUNDRIES: An analyst said that some investors would be disappointed because they were expecting a larger announcement of a partnership with TSMC Intel Corp’s incoming chief executive officer Pat Gelsinger on Thursday pledged to regain the company’s lead in chip manufacturing, countering growing calls from some investors to shed that part of its business. “I am confident that the majority of our 2023 products will be manufactured internally,” Gelsinger said. “At the same time, given the breadth of our portfolio, it’s likely that we will expand our use of external foundries for certain technologies and products.” He plans to provide more details after officially taking over the CEO role on Feb. 15, but Gelsinger was clear that Intel is sticking with its once mighty