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.
An index launched a year ago to give investors greater exposure to China’s Internet giants is now the world’s worst-performing major technology gauge. The Hang Seng Tech Index has been on a roller-coaster ride in the past 12 months. The gauge, which marks its first anniversary on Tuesday, was up 59 percent at its February peak, but has since seen more than US$551 billion in market value wiped out amid Beijing’s clampdown on the sector. That has reduced its gain to nearly 6 percent, compared with more than 40 percent for the MSCI World Information Technology Index and the NASDAQ-100 Index. The
EDUCATION AS WELFARE: New regulations threaten to upend the lucrative private education sector that teaches the public school curriculum to paying families China unveiled a sweeping overhaul of its US$100 billion education tech sector, banning companies that teach the school curriculum from earning profit, raising capital or going public. Beijing on Saturday published an array of regulations that together threaten to overturn the sector and jeopardize billions of dollars in foreign investment. Companies that teach school subjects can no longer accept overseas investment, which could include capital from the offshore registered entities of Chinese firms, according to a notice released by the Chinese State Council. Those in violation of that rule must take steps to rectify the situation, the country’s most powerful administrative
Facebook Inc on Wednesday reported its profit doubled in the second quarter as digital advertising surged, but warned of cooler growth in the months ahead in an update that sent its shares sinking. Profit rose to US$10.4 billion on revenue of US$29 billion, a 56 percent increase from last year, mainly from an increase in ad revenue, Facebook said. The number of people using the social network monthly climbed to 2.9 billion, a year-on-year gain of 7 percent, while about 3.5 billion people used at least one of the company’s apps, including Instagram, WhatsApp and Messenger. “We had a strong quarter, as we
‘IN ITS INFANCY’: The company’s 12-inch fab in Arizona is to be its first major overseas chip manufacturing site, while the fab in Japan would be its second, if it is constructed Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is evaluating the feasibility of constructing a semiconductor fabrication plant in Germany as it continues to expand overseas, it said yesterday. A shareholder at the contract chipmaker’s annual general meeting in Hsinchu City yesterday asked about the possibility following media reports earlier this month that TSMC was approached by the German government about building a chip fab in the country, as Europe joins the US and China in establishing local chip supplies in a bid to avert future chip shortages. “About the German fab, we are seriously looking into it, but it is still in its