ALERT: The EU have imposed a 15% tariff on US-manufactured jets – see the facts

NOVEMBER 2020

May 28th 2021: The EU and the US have agreed to suspend all our tariffs imposed in the context of the Airbus-Boeing disputes, both on aircraft and non-aircraft products until November 30^th 2021. Click here to read the statement

• What are the consequences?
• See our short analysis
• Have a look at the background material and links from the EU

The EU has announced countermeasures to be imposed against the US pursuant to a decision issued by the World Trade Organization (WTO) in October 2020. The countermeasures consist – amongst others – of a 15% punitive tariff on civil aircraft and were made effective November 10, 2020. We assume that this is no longer breaking news, but as none of the articles in the International News Media have been very detailed, we will try to fill in the blanks and add greater precision to the details mentioned.

The punitive tariffs are only meant to affect any Boeing manufactured aircraft. However, the tariffs are practically set-up by using weight and origin factors instead of directly targeting Boeing aircraft. The 15% will be calculated based on the present value of the aircraft.

Which customs procedures are affected?

• The tariffs are only relevant if someone is trying to fully import an aircraft.
• The tariffs will not affect an already fully imported aircraft.
• The tariffs will not affect any use of the Temporary Admission regulation.
• The normal VAT (17-27%) and customs duty (2.7-7.7%) imposed during a full importation are unchanged.

The determination of the origin will be based on the EU’s ruleset and not the American, so a certificate of origin made by the manufacturer will not automatically be accepted by EU customs agencies during a full importation. We recommend that customs are asked for a binding assessment ruling in advance to cover the issue of origin. Please, be aware that such a process might take some time but that unpleasant surprises or delays on the day of importation can be avoided.

How long will these punitive tariffs last?
This trade war has already been a long and complicated dispute. There is seemingly no simple way to solve it, so everyone should expect the trade war to last for many years to come.

What to do?
For EU insiders: Simply keep a tariff affected aircraft outside the Customs territory of the EU. No operator should pay the 15% as it will probably ruin any business case. No lender or lessor will be willing to finance such a tariff.
For EU outsiders: Use the Temporary Admission regulation if possible, but an operator must always be sure that Temporary Admission preconditions are 100% met and that the limitations are equally understood; otherwise, the risk is a full payment of the 15% punitive tariff + the above-mentioned normal VAT (17-27%) and customs duty (2.7-7.7%) imposed during a full importation.

If you have any questions whatsoever, please do not hesitate to contact us.

Selected links covering this issue
The implementing regulation from the EU
Press release from the EU