March 9, 2021

Biden Administration Announces Tariff Trifecta

Holland & Knight Alert
Nasim D. Fussell

Highlights

  • The Biden Administration took actions recently to ease the tariff burden carried by numerous industries, including aviation, food, beverage and travel goods, and previewed the administration's approach to engagement with U.S. stakeholders, Congress and trading partners on trade policy.
  • The administration announced a four-month suspension of tariffs stemming from the World Trade Organization (WTO) large civil aircraft disputes and extension of tariff exclusions on personal protective equipment (PPE) from China.

In three actions taken last week, the Biden Administration eased the tariff burden carried by numerous industries, including aviation, food, beverage and travel goods, and previewed the administration's approach to engagement with U.S. stakeholders, Congress and trading partners on trade policy.

Tariff Actions

The United States and European Union on March 5, 2021, announced a four-month suspension of tariffs stemming from the World Trade Organization (WTO) large civil aircraft disputes. This will be a complete suspension of the tariffs imposed by both sides, and will go into effect as soon as both sides complete necessary internal procedures. Friday's announcement came one day after a statement from the United States and United Kingdom similarly announcing a four-month suspension of tariffs against the United Kingdom to "ease the burden on industry and take a bold, joint step towards resolving the longest running disputes at the World Trade Organization." The United Kingdom had already discontinued retaliatory tariffs against the United States on Jan. 1, 2021.

The Office of the United States Trade Representative (USTR) also announced on March 5, 2021,  that it is extending tariff exclusions on personal protective equipment (PPE) from China. These duties resulted from the previous administration's Section 301 investigation into China's acts, policies and practices related to technology transfer, intellectual property and innovation, which preceded the COVID-19 pandemic. The Trump Administration issued PPE tariff exclusions on Dec. 29, 2020, that are set to expire on March 31, 2021. The Biden Administration will be extending these waivers through Sept. 30, 2021, in light of the ongoing efforts to respond to the pandemic.

Key Takeaways

Speculation has been high since President Joe Biden's election over whether he would take early action to reduce frictions with the European Union and other trading partners, and to generally ease the tariffs imposed by his predecessor. Trade disputes relating to China, aircraft subsidies, steel and aluminum, digital services taxes, and automobiles and automotive parts, among others, have resulted in tariffs or threats of tariffs on many products of great importance to American and European businesses, farmers, ranchers and consumers. The recent announcements regarding the large civil aircraft WTO disputes and PPE tariffs were small steps in the grand scheme of trade policymaking and dispute resolution. However, they provided the reprieve that has been so highly sought by many industries, members of Congress and U.S. trading partners. The trans-Atlantic tariff suspensions provided momentum and goodwill toward a permanent solution in the long-running WTO disputes with key European allies that the United States must have on its side in dealing with China. The extension of the PPE exclusions most immediately helps to ensure continued availability of protective equipment needed in the fight against COVID-19, but also signals that the Section 301 tariffs on Chinese goods are very likely to remain through much of 2021 or longer.

Holland & Knight will continue to track developments in these areas and the broader trade policy arena. Our attorneys can assist clients seeking to influence policy outcomes as well as those seeking administrative or regulatory remedies. Please reach out to the author or members of the International Trade Group if you have any questions.


Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.


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