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Current U.S. Retaliatory Actions
FRANCE DIGITAL SERVICE’S TAX (2019 to present)
In July 2019 the Administration initiated a Section 301 investigation into a proposal by the French government to implement a 3 percent levy on revenues of certain companies generated from providing certain digital services to French users. The Office of the U.S. Trade Representative collected written submissions and held a public hearing in August as a part of the investigation. USTR will publish its next steps at a future date.
CHINA’S PRACTICES RELATED TO FORCED TECHNOLOGY TRANSFER, UNFAIR LICENSING, AND INTELLECTUAL PROTPERTY POLICIES (2017 to present)
In August 2017 the Administration initiated a Section 301 investigation into China’s practices related to forced technology transfer, unfair licensing, and intellectual property policies. The Office of the U.S. Trade Representative completed its Section 301 investigation in March 2018, finding multiple practices that considerably undermined and adversely affected U.S. companies operating in China. Such practices identified include: forced technology transfer, requiring licensing at less than economic value, Chinese state-directed acquisition of sensitive U.S. technology for strategic purposes, and outright cyber theft. Following this investigation, the President directed agencies to explore numerous actions to protect domestic technology and intellectual property until China changes its practices.
In accordance with the President’s directive, in April 2018 USTR published a proposed trade action (Tranche 1) to raise tariffs on a product list worth an approximate $34 billion of Chinese imports. This action raised tariffs on the designated products by 25 percent and took effect in July 2018. In June 2018, USTR published a second proposed trade action (Tranche 2) to raise tariffs by 25 percent on another product list worth an approximate $16 billion of Chinese imports. This action took effect in August 2018. A third proposed trade action (Tranche 3) was published in July 2018 to raise tariffs by up to 25 percent on a further $200 billion worth of certain Chinese imports. This action took effect in September 2018, with tariffs increasing initially by 10 percent. In May 2019, USTR announced tariffs on the $200 billion tranche would rise to 25 percent effective June 1, following a lack of progress in U.S.-Chinese negotiations. In addition, USTR published a fourth proposed trade action (Tranche 4) to raise tariffs by up to 25 percent on a proposed product list worth an approximate $300 billion worth of Chinese imports, with an implementation date yet to be determined.
Information on the Section 301 trade actions against China, deadlines for comment submissions, and instructions for requesting a product exclusion can be found at the U.S. Trade Representative’s website.
Federal Register Notices
In 2004 the United States brought a challenge to the WTO against EU subsidies to Airbus. In 2011, the WTO found that Airbus received $18 billion in subsidized financing spanning decades back to 1968. While the EU removed two small subsidies, it largely left its financial support for Airbus unchanged. As a result, the United States requested the establishment of a compliance panel in 2012 to address both existing and new subsidies. In May 2018, a WTO appellate report found EU subsidies to have caused serious prejudice to U.S. interests, and the U.S. requested the authority to impose counter measures of $11.2 billion per year. The EU has challenged the U.S. damage estimate, and a WTO arbitrator is currently evaluating the damage claims.
In April 2019 USTR published a Federal Register notice inviting comments on a proposed determination and proposed action to the case, including comments on the specific products to be subject to increased duties, the level of increase in the duty rate, the appropriate aggregate level of trade to be covered by increased duties, and whether increased duties on particular products would adversely affect U.S. stakeholders. The notice also set a date for a public hearing, which was held on May 15 and 16.
Updates on the Large Civil Aircraft case may be found at the U.S. Trade Representative’s website.
Federal Register Notices
EUROPEAN COMMUNITY BEEF HORMONES (1999 to present)
The EU ban of imports of meat and meat products derived from cattle to which any of six hormones have been administered for growth promotional purposes has effectively blocked U.S. beef from entering the European Community market since 1989. Both a WTO panel and the Appellate Body ruled that the ban was inconsistent with the EU's WTO obligations under the Sanitary and Phytosanitary Measures agreement. The EU was given until May 13, 1999 to come into compliance with the WTO rulings. The EU did not lift the ban on hormone-treated beef by the WTO deadline. In response, the United States requested and received authorization from the WTO to retaliate against the EU. The United States began to impose prohibitive duties in the order of 100 percent ad valorem tariffs on 34 products from across the EU in July 1999. That list remained unchanged until modifications were announced January 15, 2009.
In May 2009, the United States and the EU signed an MOU under which the EU agreed to create a new duty-free quota for imports of specially-produced beef. Since 2009, in exchange for the elimination of increased U.S. tariffs on EU imports, the MOU has provided an opportunity for U.S. producers to export additional beef to the EU market, as intended by the parties. However, in recent years the U.S. beef industry has been prevented from gaining the intended benefits from the MOU because of increased imports under the duty-free quota from non-U.S. suppliers.
Federal Register Notices
USTR Press Releases