Trade Barriers that Affect EU-US trade and investment

The European Union (EU) and the US form the most extensive trading relationship in the world, both in terms of goods and services as well as investments. But although transatlantic cooperation has grown exponentially since the end of the cold war, there are significant tariff and non-tariff trade barriers and disputes that still hinder trade between both regions. 

Tariffs have increased on both sides since the start of the trade war 

Several goods and services traded between the US and the EU are subject to duties, and the list might expand in the months ahead. Since the start of the global trade war, both the US and the EU have imposed new tariffs and increased existing ones. 

For example, the US imposed Section 232 on imports of steel and aluminum from the EU on alleged security grounds. The EU then imposed tariffs on selected US imports in retaliation. Duties of 20 percent for lighters and 7 percent for plastic furniture fittings applied to start May 8, 2020.

Custom classifications sometimes differ from international standards 

EU and US Customs Administrations do not always follow the World Customs Organisation's (WCO) classifications, which may result in additional duties. For example, the US Customs Administration does not support the WCO's rating of multilayer parquet for customs purposes, which results in a 5% import duty instead of 0%, or even 8% when multilayer parquet is considered plywood. 

Subsidies give companies unfair advantages

Subsidies may create an unfair competitive advantage in international trade and are therefore often considered a trade barrier. Most recently, the US and the EU are fighting over subsidies for Boeing and Airbus. 

The US administration argues the governments of Germany, France, Spain, and the United Kingdom support Airbus with illegal subsidies. Likewise, the EU explains that the US is supporting the planemaker Boing with unfair financial assistance. The case is currently being negotiated, arbitrated by the WTO. The dispute has already resulted in increased tariffs on both sides. 

Taxes and regulations

The US sees some of the EU's overall and country-specific policies as trade barriers, such as laws on data protection, digital trade, and penalties for corporate tax avoidance. In particular, a digital services tax initiated by France in 2019 has caused concern among US businesses and lawmakers. The US then launched an investigation based on concerns that the tax will discriminate against U.S.-based technology companies.

International trade can be complicated, even between countries that have a long-standing history of mutual trade. Laws, regulations, and politics may change, and businesses on both sides need to keep up-to-date. To make it easier, Export Portal provides all the documents and advice businesses need to be successful in international trade. Take a look at our database and learn all you need to know to do business internationally.