Fitness Equipment Caught in Middle of U.S.-E.U. Airplane Tariff Spat

E.U. offers to drop 25 percent tariffs if U.S. will, but no action expected until new USTR seated

On November 10, 2020, the E.U. announced tariffs on $4 billion in imports from the U.S. in response to the 2019 U.S. action to place tariffs on $7.5 billion in E.U. imports. The nexus of the tariff war are E.U. subsidies to Airbus and U.S. subsidies to Boeing, both violated WTO rules and opened the door to punitive tariffs as a remedy. The U.S. placed tariffs on E.U. imports in 2019 after the WTO ruled in its favor on Airbus, and last month, the E.U. responded in-kind when the WTO ruled in its favor on Boeing subsidies.

The E.U. primarily targeted food and beverage imports for the 25 percent tariff, but also included fitness equipment among the non-food imports for new tariffs. The E.U. Trade Commissioner has stated the future of the tariffs is up to the U.S., as the E.U. will drop the tariffs if the U.S. will do same. To date, the U.S. Trade Representative has not given any signal that the U.S. will change course and drop the tariffs. President-elect Biden has made repairing relationships with our trading partners a priority, so alternatives to these tariffs are expected.

In anticipation of a change in U.S. policy, SFIA engaged our partners in the E.U., the Federation of European Sporting Goods Industry (FESI) and the World Federation of the Sporting Goods Industry (WFSGI — based in Geneva, Switzerland) to deliver the message to E.U. trade officials. FESI and WFSGI shared with E.U. officials the harm tariffs are causing fitness equipment manufacturers at a time when industry is suffering from COVID impact on health clubs. E.U. officials were also reminded of the key role active lifestyles play in positive COVID outcomes as the E.U. struggles to contain the pandemic.

SFIA will deliver a message to the incoming U.S. Trade Representative requesting alternative remedies to these tariffs and, in the interim, communicate our concerns to a career USTR employee to have the industry’s position on record when the new regime takes over next month. All signals point to an end to the E.U.-U.S. airplane subsidy tariff war when there is a new U.S. Trade Representative, but it will require negotiations with our E.U. counterparts.

Please contact Bill Sells, SFIA Senior Vice President ofGovernment and Public Affairs, at bsells@SFIA.org for additional information.