The European Commission on 3 January 2025 has published a proposal for a Regulation Of The European Parliament And Of The Council amending Regulation (EU) 2018/196 of the European Parliament and of the Council of 7 February 2018 on additional customs duties on imports of certain products originating in the US.

Regulation 2018/196 was introduced to consolidate Council Regulation 673/2005 of 25 April 2005, along with its subsequent amendments.

This proposal seeks to amend Regulation (EU) 2018/196 by including a de minimis threshold for the imposition of retaliation applied in relation to the WTO dispute on the United States’ Continued Dumping and Subsidy Offset Act of 2000 (‘CDSOA’, or the Byrd Amendment). It also seeks to align the regulation to what is provided in the Interinstitutional Agreement on Better Law-Making.

On 27 January 2003, the Dispute Settlement Body (‘DSB’) of the World Trade Organization (‘WTO’) adopted the Appellate Body report1 and the Panel report, as upheld by the Appellate Body report, finding that the Continued Dumping and Subsidy Offset Act (‘CDSOA’) was incompatible with the United States’ obligations under the WTO agreements.

Since the United States failed to bring its legislation into conformity with the WTO agreements, the European Community (‘Community’) requested authorisation from the DSB to suspend the application of its tariff concessions and related obligations under the General Agreement on Tariffs and Trade (‘GATT’) 1994 to the United States.

The United States objected to the level of suspension of tariff concessions and related obligations, and the matter was referred to arbitration.

On 31 August 2004, the Arbitrator determined that the level of nullification or impairment caused every year to the Community was equal to 72 % of the amount of CDSOA disbursements relating to anti-dumping or countervailing duties paid on imports from the Community for the most recent year for which data were available at that time, as published by the United States’ authorities.

The Arbitrator concluded that the suspension by the Community of concessions or other obligations, in the form of the imposition of an additional import duty above bound custom duties, on a list of products originating in the United States covering, on a yearly basis, a total value of trade not exceeding the amount of nullification or impairment would be consistent with WTO rules.

On 26 November 2004, the DSB granted the authorisation to suspend the application to the United States of tariff concessions and related obligations under GATT 1994 in accordance with the decision of the Arbitrator.

As a result of the United States’ failure to bring the CDSOA in compliance with its obligations under the WTO agreements, pursuant to Regulation (EU) 2018/196 of the European Parliament and of the Council4, a 4.3 % ad valorem additional customs duty was imposed on imports of certain products originating in the United States.

In conformity with the WTO authorisation to suspend the application of concessions to the United States, the Commission is to adjust the level of suspension annually to the level of nullification or impairment caused by the CDSOA to the Union at that time.

In recent years, the level of nullification or impairment caused to the Union on the basis of the data published by the United States’ Customs and Border Protection has decreased. For example, in 2024, it was calculated at USD 34,98 resulting in a rate of additional import duty of 0,00002 %. As collecting this additional import duty would have no trade effect but result in a disproportionate administrative cost for the Union, the rate of additional import duty was set at 0 % by Commission Delegated Regulation (EU) 2024/12395, which amended Regulation (EU) 2018/196 accordingly.

Given that the CDSOA was effectively repealed on 1 October 2007, it is expected that the level of nullification or impairment and, consequently, of suspension will stay at this significantly decreased and economically negligible level.

The de minimis threshold should be set at USD 30,000 for disbursements under the CDSOA relating to anti-dumping and countervailing duties paid on imports from the Union for the most recent year for which data are available at that time, as published by the United States’ authorities (U.S. Customs and Border Protection). Below such a threshold, the additional import duty, as resulting from the formula mandated by the WTO authorisation, would have no trade impact and would thus be economically negligible.