July at-a-glance … taxes, tariffs & trade
Senators advocate for tariff removal
U.S. Sen. Ron Johnson (R-Wis.) and several colleagues sent a letter to President Biden urging the federal government to end the trade war “that is damaging many U.S. businesses.” In the letter, the senators said, “Unfortunately, it is difficult to find a U.S. industry that has not been negatively affected by tariffs and the trade war. These industries and businesses have faced increased costs, lost sales and market access, and competitive disadvantages due to the tariffs. Moreover, many businesses have described that the primary beneficiaries of the of the trade war are their foreign competitors that do not face the same tariff costs.”
Joining Senator Johnson in sending the letter were senators Chuck Grassley (R-Iowa), Deb Fischer (R-Neb.), Mike Lee (R-Utah), Joni Ernst (R-Iowa), Thom Tillis (R-N.C.) and Pat Toomey (R-Pa.).
EU continues steel tariffs for three more years
To protect its domestic steel industry from increased imports, the European Union (EU) has extended quotas and tariffs for 26 grades of steel that have been in place since 2018 for another three years. The decision reflects the fact that the U.S. 25 percent tariff on imported steel remains in place. Consequently, the EU is looking to protect its market from countries with excess product. China, India, Russia, South Korea, Turkey and Ukraine are the largest exporters of steel to the EU.
Resolution of aircraft dispute with EU results in removal of $11.5 billion in tariffs
The U.S. and EU have made significant progress resolving the Airbus-Boeing Dispute, the longest standing dispute in the history of the World Trade Organization (WTO), and removing $11.5 billion in retaliatory tariffs in the process. The dispute began in 2004 when the U.S. filed a case at the WTO against the EU, arguing that the bloc was illegally subsidizing Airbus. The EU filed a similar complaint against the U.S. in May 2005 alleging unlawful support to Boeing.
“After years of bitter litigation and weeks of intense diplomacy, we have reached a deal on a set of high-level principles that resets U.S.-EU engagement in the large civil aircraft industry,” said U.S. Trade Representative Katherine Tai. “Our goal was clear – to forge a new, cooperative relationship in this sector so that our companies and our workers can compete on a more level playing field. The agreement includes a commitment for concrete, joint collaboration to confront the threat from China’s non-market practices, and it creates a model we can build on for other challenges.”
EU changes VAT and tariff code labeling requirements
Effective July 1, the EU requires U.S.-based companies that sell goods online to customers in the EU comply with new rules on value-added taxes (VAT) and tariff code labeling. All goods priced at up to 150 euros are now subject to VAT, which the seller must collect and pay. Previously, any item sold for less than 22 euros was exempt from VAT. The rules for items that cost more than 150 euros are unchanged. Shippers can use the EU’s Import One-Stop Shop to collect VAT.
Additionally, items sent to the EU must now include a six- to 10-digit tariff code. Without the code, items could be delayed at customs or returned. Information on the codes is available from the European Taxation and Customs Commission and the U.S. International Trade Commission.