USHSLA Applauds U.S. Decision to Exempt EU Leather Imports from Retaliation in Airbus Subsidies Dispute4 October 2019
The US Hide, Skin and Leather Association (USHSLA) today welcomed the U.S. government’s decision to exempt from retaliation EU leather imports, after the U.S. won $7.5 billion annually in its World Trade Organization (WTO) dispute with the EU over illegal subsidies to Airbus. This is the largest arbitration award in WTO history, and paves the way for the U.S. to implement countermeasures against the EU.
USHSLA earlier this year urged the U.S. government against levying tariffs on EU leather handbag imports to the U.S., citing the significant, adverse consequences for the U.S. hides, skins and leather industry from taking such an action.
“The U.S. hide, skin and leather industry has worked closely with its partners and companies in the EU to build trust and confidence in our product exports, and thanks the Administration for recognizing the harm that would be caused to the U.S. industry from imposing tariffs on EU leather imports,” said USHSLA President Stephen Sothmann. “American businesses, workers and consumers would have ultimately shouldered the costs stemming from retaliatory actions applied to foreign imports produced using U.S.-based materials.”
EU leather producers rely on high-quality U.S. hides and wet blue exports to produce fine finished leather goods, much of which is then exported back to the U.S. for purchase by American consumers. Raw materials, including cattle hides and wet blues, typically account for approximately 60% of the value of a finished leather good. The U.S. industry has worked diligently over many decades to position itself as the preferred supplier of raw materials to the EU manufacturers of these products.
“Placing tariffs on the leather supply chain would have unraveled years of market development work in the EU by the U.S. hides, skins and leather industry, and would have further strained the industry at a time when it faces significant challenges, including declining prices, retaliatory tariffs in other key markets and reduced overall global leather demand,” Sothmann added. “We stand ready to work with the administration to find effective long-term solutions that meaningfully address commercial issues with the EU, while ensuring we preserve our important, robust trading relationships in the EU market.”
Instead, the tariffs announced today will be limited to 10% on large civil aircraft and 25% on agricultural and other products from the EU.