Punitive tariffs: Customs dispute with the US

The EU and the US have announced the suspension of US steel and aluminum punitive tariffs as well as all EU countermeasures. Tariff-free quotas are being introduced in their place. The new regulations will apply starting January 1, 2022.


Reason for the customs dispute between the EU and the US

The reason for imposing the customs tariffs was the dispute over government subsidies to the aircraft industry. Both parties accuse each other of unlawful subsidization of their respective aircraft manufacturers and the resulting competitive disadvantages for competitors. The World Trade Organization (WTO) had ruled in favor of both the US and the EU, thus clearing the way for reciprocal additional tariffs.

To what extent does the customs exemption affect Swiss companies?

Swiss metal companies that export very special types of steel—for the auto industry, for example—to the US cannot benefit from the customs exemption. The 25 percent customs tariff introduced by the Trump administration in 2018 to protect its own steel industry still applies to these products. This makes Swiss steel more expensive in the US.

Consequently, Switzerland is maintaining its complaint against the US that it filed with the World Trade Organization (WTO) in Geneva in 2018 together with other countries such as Norway, China, Turkey and India.

Swiss companies can also benefit from these duty-free quotas if they either export steel or aluminum products from a plant in the EU to the US (e.g. crosstrade) or if they export goods with EU origin from Switzerland to the US. Alfonso Orlando, Head of Export Help at S-GE

Customs dispute between US and China

Since 2018, the US and China have imposed punitive tariffs on each other. The US accuses China (just as it accuses the EU) of unfair trade practices. In January 2020, the US and China signed a partial trade agreement (Agreement on a Phase One trade deal) that, among other things, is intended to prevent the imposition of further punitive tariffs.

To what extent is Switzerland affected by the US customs dispute with China?

There may be higher tariffs, export controls on high-tech products, localization efforts in trade chains and standards in cross-border data flows. The MEM, ICT, medtech, infrastructure, artificial intelligence and robotics sectors are particularly affected.


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