The US Government has issued a statement proposing new import duties, on the basis of what they believe to be subsidies from the EU to Airbus (as a Group) valued at $11 Billion per year. This figure is subject to an arbitration at the World Trade Organization (WTO), the result of which is expected to be issued later this year.
This is clearly fully endorsed by President Trump:-
The World Trade Organization finds that the European Union subsidies to Airbus has adversely impacted the United States, which will now put Tariffs on $11 Billion of EU products! The EU has taken advantage of the U.S. on trade for many years. It will soon stop!
— Donald J. Trump (@realDonaldTrump) April 9, 2019
The Office of the United States Trade Representative (USTR) has thus begun a process under Section 301 of the Trade Act of 1974 to identify products of the EU to which additional duties may be applied until the EU removes those subsidies to Airbus. “This case has been in litigation for 14 years, and the time has come for action. The Administration is preparing to respond immediately when the WTO issues its finding on the value of U.S. countermeasures,” said U.S. Trade Representative Robert Lighthizer. “Our ultimate goal is to reach an agreement with the EU to end all WTO-inconsistent subsidies to large civil aircraft. When the EU ends these harmful subsidies, the additional U.S. duties imposed in response can be lifted.”
In line with U.S. law, the preliminary list contains a number of products in the civil aviation sector. Once the WTO arbitrator issues its report on the value of countermeasures, USTR will announce a final product list covering a level of trade commensurate with the adverse effects determined to exist.
Military helicopters are excluded.
Pre-owned helicopters are also excluded – the list of products specifically states “New helicopters”.
While the proposed duties are primarily targeted at Airbus, Guimbal will be dragged into this, but Leonardo will not. The types of product listed include complete helicopters manufactured in Germany, France, Spain or UK. While Leonardo does produce helicopters in the UK, there are none planned for export to the US, and they should be able to produce anything sold to US customers from the production lines in Italy to avoid the import duty.
Guimbal do not have that flexibility, but it is not beyond scope for US sales to go via (for example) a Canadian dealer who would then sell them “pre-owned, low hours” into the US.
The list also includes “substructures for aircraft exceeding 15 tonnes”, which does not impact the helicopter industry. However, it would not take much for the unpredictability of President Trump to include these (or anything else) at the click of a finger. Airbus Helicopters has production lines in the states of both Texas and Mississippi, and these are partially reliant on imported parts from the EU. For example, Airbus H145s completed and first flown in the US are built with significant parts from Germany – indeed the original H145 cabin skeleton arrives at the Donauworth plant Germany from Samsung (ex Kawasaki) in Japan for some work before being shipped to the US.
Airbus have issued the following statement to HeliHub.com about this situation :- “Airbus has taken all necessary measures to comply with the relatively minor elements highlighted by the WTO in May 2018 (which, even then, were less than 6% out of all Boeing’s claims) regarding alleged Airbus aid. By contrast, Boeing has not shown any willingness to comply with the 28 March 2019 WTO decision regarding the massive subsidies received by Boeing that are clearly in contravention of WTO rules. The adoption expected this week of the WTO report will allow EU to start sanctions proceeding with far larger countermeasures against the US. This would lead to unnecessary trade tensions and that shows the only reasonable solution is a negotiated settlement.”
HeliHub.com requested a statement from Helicoptères Guimbal, but did not receive a response by press time.
Jeremy Parkin – HeliHub.com