SALT Deductions Get a Boost From the IRS

If you are one of the people who pays more than $10,000 per year in state and local taxes, then you were probably dismayed when the Tax Cuts and Jobs Act (TCaJA) eroded the State and Local Tax (SALT) deduction, limiting it to only the first $10,000 in taxes. For some people, the rate-based tax cuts were more than offset by the loss of a large part of the SALT deduction.

The IRS has announced a plan to issue regulations that may help alleviate the SALT deduction issue for S-corporation owners. The plan was announced in IRS Notice 2020-75.

The proposal would permit state laws that allow the taxes to be paid at the entity level, rather than at the pass-through personal level.

State income tax codes typically allocate business income from S-Corporations and other pass-through firms to the owners’ individual income tax returns (the income “passes-through” to the individual). An entity-level tax would assess state tax liability directly on the firm before the income passes to the owners. Connecticut, Louisiana, Maryland, New Jersey, Oklahoma, Rhode Island, and Wisconsin have all adopted entity-level taxes that offer credits against the owners’ personal tax liability (thus shifting the tax to the business while offering a credit to the individual so that the individual does not pay the tax already paid by the business). This state tax is deductible by the entity so it returns the taxpayer to a tax situation that is equivalent to the taxpayer’s pre-TCaJA situation relative to the SALT-deduction.

In IRS Notice 2020-75, the IRS announced plans to issue regulations to effect this change. The proposed regulations have not yet been issued as of today. It is unclear whether a President Biden would allow such regulations to proceed to a final rule.

We will continue to monitor this development and assess how it may affect our members.

FAA Clears 737 MAX for Service

Today, the FAA issued Safety Alert for Operators 20015 (SAFO 20015) regarding the return to service of Boeing 737-8 and 737-9 airplanes (referred to collectively as the 737 MAX).

Boeing has made changes to the 737 MAX:

  • Aircraft design,
  • Aircraft Maintenance Manuals (AMM),
  • Fault Isolation Manual (FIM),
  • Component Maintenance Manual (CMM),
  • Maintenance Review Board Report (MRBR), and
  • Master Minimum Equipment List (MMEL).

The FAA also issued Notice 8900.570 today, to provide guidance concerning this return to service of 737 Max aircraft that received their certificates of airworthiness before November 18th (today) . The FAA is also issuing airworthiness directive 2020-24-02 (as of this time, this AD is not yet available on the FAA’s websites nor on the Federal Register website but it ought to be available quite soon).

Contacts at U.S. air carriers told me this morning that they are actively working to return these aircraft to service, now that they’ve been cleared by the FAA. This aircraft design has probably received more government scrutiny than any design in the history of aviation, so many industry insiders have a great deal of confidence in the current 737 MAX design.

More details also continue to be available on Boeing’s website, which has a dedicated page on the 737 MAX.

UPDATE: Airworthiness directive 2020-24-02 was published two days later, in the November 20 Federal Register.

Do Your Tax Planning for PPP Loan Forgiveness

Many of ASA’s members obtained PPP Loans, which had been authorized under the CARES Act. One important feature of the loans is the ability to seek loan forgiveness.

Last month the Small Business Administration posted new guidance on PPP loan forgiveness. The new guidance is still incomplete, and leaves a lot of questions unanswered; but it is meant to allow banks to start the process of accepting loan forgiveness applications.

Many banks are still not yet accepting loan forgiveness applications. The Small Business Administration just posted an updated application package for PPP loan forgiveness on Saturday, October 31. So we should expect movement in this area, very soon.

But the question for the ASA Community is. “should I file for loan forgiveness when my bank says it is ready, or should I wait until I am ready?” Filing for loan forgiveness may have tax consequences, and the precise nature of those consequences is still unclear because IRS guidance has suggested a complicated tax treatment for loan forgiveness (in their defense, the complicated tax treatment is based on pre-existing complicated tax laws).

With this in mind, we recommend that you take a strategic approach to the process of PPP loan forgiveness.

STEP ONE: Identify your Covered Period

For PPP loan forgiveness purposes, the Covered Period is a period that starts on the day you received the PPP loan. For example, if you received your PPP Loan on June 25, 2020, then that is the first day of the Covered Period.

The Covered Period lasts for either 8 weeks or 24 weeks. This is because the CARES Act set the Covered Period as an eight week period, but then Congress amended the law so that the Covered Period became a 24-week period. Those who got PPP loans before the change were allowed to choose either option:

  • If you got your PPP loan on or before June 4, 2020, then you get to choose whether your Covered Period is 8 weeks or 24 weeks (whichever one is more optimal for you).
  • If you got your PPP loan on or after June 5, 2020, then your Covered Period is 24 weeks.

For example, if your PPP loan was distributed on June 25, 2020, then you would be subject to a 24-week Covered Period which would end on December 10, 2020.

STEP TWO: Identify the date that is ten months after the last day of the Covered Period

The date that is ten months after the last day of the Covered Period is your deadline for filing the loan forgiveness application. Note that this date is likely to be in 2021 for most recipients. A 2021 deadline typically means that you can file for loan forgiveness in 2020, or you can file in 2021.

If we continue to use the same example period, above, and your Covered Period starts on June 25, 2020 and ends on December 10, 2020, then you will need to submit your loan forgiveness application within ten months, by October 10, 2021.

STEP THREE: Start assembling the loan-forgiveness documentation now.

On August 4th, we advised the community to start thinking about assembling their loan-forgiveness documentation. That blog post links to a PPP loan forgiveness video that ASA produced to help guide members as to the documentation that they should be assembling to support the PPP loan forgiveness application.

Even if your bank is not yet accepting loan forgiveness applications, by assembling the appropriate documentation you can give yourself more flexibility to file the application when you want to do so. You will be able to make a decision about filing optimal dates and then immediately be able to follow-through on the application.

STEP FOUR: Watch for more details!

The law and guidance in this area continues to change. As previously mentioned, there is a conflict between Congress’ apparent tax-free intent and the IRS’ guidance on the matter (which makes the consequence of loan forgiveness to be substantially the same as if the loan forgiveness was treated as income).

New guidance continues to be issued by the SBA and Treasury. So it makes sense to contonue to watch that new guidance (and watch this blog) to identify how the changes in policy might affect your decisions

STEP FIVE: Make an intelligent decision about when to file your loan forgiveness application

An important part of making the intelligent decision is to consult with appropriate tax lawyers and accountants about the tax-effect your decision might have.

Unless the law is changed, the loan forgiveness will not be taxed as income, but the wages paid by the loan will not be allowed to be deducted as ordinary-and-necessary business expenses. For most businesses, this should yield a result that is equivalent to treating the loan forgiveness as income, but also treating the permitted expenses that were paid out of that loan as deductible expenses (the way that PPP loan forgiveness works is more complicated from a tax accounting perspective).

Normally (for accrual taxpayers) the loan forgiveness would not count as income until you file for forgiveness, and the forgiveness application is accepted. Similarly, the deduction for the wages paid from the loan would not be accrued as a deduction until three elements are met:

  • all the events have occurred that establish the fact of the liability,
  • the amount of the liability can be determined with reasonable accuracy, and
  • economic performance has occurred with respect to the liability

This is called the “all-events test.” If it is uncertain whether the wage payment might be deductible, then it is possible that the all-events test could prohibit someone from accruing a deduction for the payment until it was clear that the deduction could be accrued (which might have the effect of postponing accrual of the deduction for 2020 wages paid from the PPP loan until 2021 if the PPP loan forgiveness is not established until 2021. This is something that you should review with your tax accountant to see whether it might apply to your own tax situation.

As you can see, tax treatment of the amounts subject to the PPP is a complicated situation – while we await further IRS guidance about this, it is important to chose whether loan-forgiveness in 2020 or 2021 is preferable The availability of IRS guidance could be a factor that impacts this decision.

STEP SIX: File your loan forgiveness application when it makes the most sense to do so, for your business

Once you’ve consulted with your tax accountant on the optimal way to approach loan forgiveness, and once you’ve reviewed all of the latest guidance from the US government, then you will select a date range that makes sense in which to file your application. Don’t forget to file within ten months after the end of your Covered Period!

China to Sanction U.S. Aerospace Manufacturers

The Chinese Government has said that China will sanction several US defense companies for selling arms to Taiwan. All three companies are active in the aerospace realm.

On Monday, Chinese Ministry of Foreign Affairs spokesperson Zhao Lijian called on the U.S. to break ties with the government on Taipei, and he announced plans to sanction Lockheed Martin, Raytheon Technologies and Boeing Defense. He did not provide further details of the sanctions, and we’ve waited this week to learn of the details, but none have yet been released.

Zhao’s specificity in naming Boeing Defense could mean that Boeing Commercial Aircraft Group is not affected by the sanctions. This is mere supposition, though; the actual reach of the sanctions is not yet known.

Adam Ni, director of the China Policy Center in Canberra, Australia, suggested that he “suspect[s] the strategy will not be formal sanctions, but rather through administrative regulatory means.” This could include punitive tariffs or similar means that effectively prevent certain business with these sanctioned entities.

We will continue to watch, to learn how this might affect other U.S. aerospace companies.

This Week: Free Aircraft Parts Conference (and PreConference Trivia Contest)

This week MARPA will feature a free two-day conference on aircraft parts manufacturing issues. The conference will run from 11AM EDT until 1 PM EDT on Wednesday and Thursday. Everyone from the ASA Community is invited.

The conference is open to the public and features a number of really great speakers packed into these two hour sessions. The day one keynote speaker Kofi Appah, the FedEx Express Managing Director for Aircraft Materiel and Air Operations. The day two keynote speaker is FAA Associate Administrator Ali Bahrami. Speakers from airlines, A4A, EASA, IATA and other sources will discuss economic factors, regulatory factors, and commercial factors affecting the aviation parts market and they will help chart the way forward. Click here for the full agenda.

And, for those who want to learn more about PMA parts, the FAA will provide a “PMA 101” workshop on October 20th at 11 AM EDT. Thi ssession is also free for anyone who registers for the Conference.

You can register for this free conference online at the MARPA website (click on the registration link to register through the “jotform”).

Normally, these conferences feature a premeeting reception on the night before the conference. Since we cannot get together physically, there will be a gathering on October 20 (tomorrow) at 5 pm EDT. That gathering will include a trivia contest and an opportunity to join the discussions.

DATE: October 20, 2020
TIME: 5:00pm Eastern – 5:30pm Eastern
MEETING ID: 827 7024 5563, URL PASSCODE: PMAparts DIAL IN NUMBER: +1 646 558 8656, PASSCODE: 74065836 TRIVIA WEBSITE LINK: (Kahoot session number will be provided during the Conference Kickoff).

Can a Disassembler Convert U.S. Aircraft Paper Records to Electronic Format?

More and more of ASA’s members are parting-out aircraft.  Our members have asked, “when a distributor that intends to part-out an end-of-life aircraft receives paper records from the last owner/operator, what are the rules with respect to conversion of those records to electronic format?”

Short Answer

When a U.S. company – like a distributor – becomes the owner of an aircraft with the intent to disassemble it for parts (and not to operate the aircraft), it has certain record retention obligations for as long as the aircraft remains U.S.-registered; however those records may be converted into, and retained in, an electronic format so long as the electronic versions accurately reflect the correct information, and (b) remain reasonably accessible to those who are supposed to have access under the regulations (like the government).  This answer does not address the wide-range of industry commercial concerns, like the potential commercial desires of any subsequent owner of the parts removed from the aircraft.


We typically think of “original records” as the paper records.  But companies that own aircraft and wish to disassemble them for their parts may wish to convert the paper records to electronic format, such as by scanning them.  Reducing the records to an electronic format allows them to be stored more conveniently, it facilitates management of record retention policies, and it also makes it easier to share information with potential buyers.

This article is limited only to those situations where a business that does not hold an FAA certificate takes possession of an aircraft (e.g. the aircraft is not listed on an operating certificate) with the intent to disassemble the aircraft and not to operate the aircraft.  This article is not legal advice with respect to any particular fact pattern.  Your actual fact pattern may vary, so you should use the article as a tool for recognizing issues to discuss with your aviation attorney.

US Rules on Records

There are a number of US laws and policies that encourage the use of electronic records and alternative information technologies.  Some of the applicable laws include:

These laws and policies typically require that the government must accept electronic records, but they permit the government agencies to develop standards for implementing electronic records systems.

US law today makes it clear that if a statute, regulation, or other rule of law requires retention of a transaction record then one way to meet the record retention policy is to retain an electronic record of the information that (a) accurately reflects the information set forth in the record, and (b) remains reasonably accessible to all persons entitled by law to access the record. 15 U.S.C. § 7001(d)(1).

The FAA has established policy for records that are required by FAA regulations.  They make it clear that their policy does not apply to records that are not required under FAA regulations.  E.g. FAA Order 8900.1 chg 466 vol. 3, Chap. 31, Section 2, ¶ 3-3001

Under FAA regulations, certificate holders need FAA approval for certain electronic manuals and/or other electronic records (e.g. 14 C.F.R. § 121.683(c)), and other electronic manuals and/or other electronic records need to be in systems that are acceptable to the FAA (e.g. 14 C.F.R. § 145.219(a)).

The FAA has clarified that when FAA rules require some sort of record to document an event, this is considered to be a “record” under FAA regulations, and the system for keeping that record is a recordkeeping system.  Under FAA guidance, though, a system that collects information that does not preserve the evidence of an event – that is not a “record” – is not a recordkeeping system; it is an information management system.  The FAA does not regulate such information management systems.

What makes this difficult is that there is some common data – some records – that are regulated by the FAA; and there are some data that are not.  For example, the owner of an aircraft must keep records of the current status of life-limited parts (14 C.F.R. § 91.417(a)(2)(ii)), current status of airworthiness directive implementation (14 C.F.R. § 91.417(a)(2)(v)), and copies of the maintenance records for major alterations (14 C.F.R. § 91.417(a)(2)(vi)).  On the other hand, there is some information that is commonly kept that is not directly regulated by the FAA.  For example, the FAA does not specifically regulate incident/accident statements (note that the FAA does require the owner/operator to keep flight recorder/voice recorder data for 60 days after an accident, but this is different from the traditional incident/accident statements).  Both of these sorts of information (regulated and unregulated) are going to be found in a typical aircraft data package.

The Part 91 record retention requirements apply as long as the aircraft is a US-registered civil aircraft.  14 C.F.R. § 91.401.  So one strategy for ending any FAA-record-keeping requirements is to de-register the aircraft.  One problem with this strategy is that commercially-typical removal tags indicate the registry number of the aircraft from which the part was removed.  In order to allow a relationship between the registry of the aircraft and the part that was removed from that aircraft, it is typical to wait to de-register the aircraft until after the expected disassembly process has been completed.  Which means that the owner continues to have regulatory record-keeping obligations.

Despite the fact that an owner typically retains both regulated “records” and unregulated “information” the retention mechanisms for both are largely unregulated for owners who do not hold certificates (like operating certificates).  The requirements for owners’ maintenance records are found in 14 C.F.R. § 91.417.  That regulation requires the records to be kept, but it does not specify a system for keeping the records, nor does it specify that such a system must be approved by or acceptable to the FAA.  It also does not require “original” records.  This means that an owner can convert records to an electronic format (such as by scanning them) and that owner will typically remain in compliance with the 14 C.F.R. § 91.417 (subject to the previously-mentioned caveats).

Commercial and Non-US Concerns

It is important to recognize that commercial norms may impose de facto requirements for additional record-keeping, and that different customers may have different commercial expectations.  It is therefore important to know and understand the marketplace expectations with respect to any parts that are removed from an aircraft for sale.

Some nations have laws or policies that may impose additional record-keeping expectations.  For example, under AC-120-FS-058 Rev. 3, China now requires that where parts have been removed from an aircraft and are subsequently intended to be installed on Chinese-registered aircraft, such parts must have been removed by a CCAR 145 organization (and thus must have the correlative removal documentation).

Similarly, there are laws and regulations concerning fraud that will prohibit any sort of material misrepresentation, so it is important to ensure that any electronic version of the data is an accurate portrayal of the underlying records.

Emergency Response Guidebook is Now Available (HazMat)

The 2020 Emergency Response Guidebook (ERG) is now available for download! This book is published every four years as part of a joint effort among Argentina, Canada, Mexico, and the United States. It is intended to be a preliminary guide for first-responders who encounter an accident / spill / leak / release involving dangerous goods (hazardous materials). It is equally valuable, though, for members of the aircraft parts community who might face an accident / spill / leak / release involving dangerous goods in their own facility.

Not sure how to use the Guidebook? You can find instructions within the book, but we also include instruction on how to use the ERG as part of our hazmat class, which is offered twice a year and features discounted class fees for members of ASA (and an extra discount for those who sign up for a 2021 class before the end of 2020).

You can find the English version of the 2020 ERG online, here:

Also, for your reference a copy can be reviewed, below:

Hazmat: Overpacks of Mixed Materials


One of our trade association members asked whether the materials that are placed into an overpack must be the same, or if they can be different?  We received a related question about whether an overpack can consist of only one item.

An overpack

An overpack. Image from Basic Crating & Packaging, Inc.

What is an Overpack?

When shipping hazardous materials, an overpack is an enclosure used for protection or convenience in the handling of packages.  Examples of overpacks can include properly prepared packages assembled together under shrink-wrap on a wooden pallet, or a set of properly prepared packages placed together into a larger fiberboard box (used as a protective outer packaging).  One key fact here is that there are properly prepared packages of hazardous material, and each such package stands on its own for purposes of compliance to the relevant hazardous materials/dangerous goods regulations.  These properly prepared packages are then placed into another containment, and that other containment is the overpack.

Mixed Material Overpacks

The first member question was whether the materials in an overpack need to be the same substances. They do not. One may overpack different things in the same overpack, as long as no rule precludes them from being packed together.  Examples of rules that would preclude certain materials from being packed together include:

Mixing of materials is also permitted under international standards: there is an example of this in the IATA Dangerous Goods Regulations (61st Edition) at Figure 8.1.K – this figure is a sample Dangerous Good Declaration that shows motor spirits and aerosols being overpacked together.

The United States rules on overpacks are found at 49 C.F.R. § 173.25.

Single-Item Overpacks

The second question we received was about whether an overpack can consist of only one item.  It may.

There is no requirement in the United States regulations nor in the ICAO (IATA) rules that an overpack must consist of more than one properly configured package.  In fact, an overpack may contain one item, or more than one item and it may contain a combination of both properly packaged hazardous materials and also non-hazardous materials.

Examples of situations where you might want to create an overpack for a single properly packaged hazardous material include:

  • Convenience: If one needs to use a forklift to place the item on a high shelf, then one might shrink-wrap the package onto a wooden pallet in order to make it easier to manipulate with a forklift.
  • Protection: If one is expecting the package to be exposed to extreme weather, then one might place a package that is based on a fiberboard box into a plastic drum as an overpack to protect the box from getting wet.

100 Days Until the End of the Brexit Transition

Brexit has occurred. The UK is no longer part of the EU. But the effect of Brexit was softened with a year-long transition period during which the UK and EU were supposed to negotiate their future relationship.

The last day of the current transition period is scheduled to be December 31, 2020. That leave little time for the UK and EU to complete their negotiations; negotiations that have been hampered as each deals with the issues surrounding Covid-19.

Unfortunately, the precise future for aircraft parts manufactured under UK CAA production approval or maintained under UK CAA maintenance approval remains a little unclear.

State of Negotiations

Last year, the UK and EU signed a Withdrawal Agreement that included a one year transition period. During this transition period, the EU treated the United Kingdom as if it were a Member State, with the exception of participation in the EU institutions and governance structures. This notably meant that the UK continued to enjoy the privileges of the EASA bilateral agreements and the world treated certificates in the UK as if they were still issued under EASA processes. Thus, an EASA Form One issued by a UK CAA repair station on January 2, 2020 had the same legal effect as one issued on December 30, 2019.

The Withdrawal Agreement also included an Irish Protocol that guaranteed no hard border between Ireland and Northern Ireland, but in return required a customs border to be established between Northern Ireland and the rest of the UK. Recently, Prime Minister Boris Johnson has pledged to renege on the Irish Protocol; which would mean that there would be no customs border between Northern Ireland and the rest of the UK; but that implies that there would be a customs border between Northern Ireland and Ireland. This pledge has been criticized as a potential violation of international law. Subsequent British efforts to provide a legislative support for the pledge have been called “lamentable” by prominent figures like UK Government Special Envoy (and human rights activist) Amal Clooney.

A clause that permitted extension of the Withdrawal Agreement had a deadline of July 1, 2020 and that deadline seems to have passed without the extension being invoked. This doesn’t really prevent the parties from agreeing to an extension – but it makes it a little less likely.

It is also worth noting that under the EU’s Brexit Regulation, certain certificates, like UK type certificates become invalid for EU purposes nine months after the Withdrawal Date (January 31, 2020), which means that they could become invalid. Contrast this with a provision in Article 10 of the same regulation that invalidates that Regulation if a Withdrawal Agreement is reached pursuant to Article 50(2) (the EU provision that permits a withdrawal agreement with a withdrawing member of the EU). The current EU-UK Withdrawal Agreement cites Article 50(2) as part of its basis, but it does not actually address how aviation will be covered. Instead, the EU and UK agreed to “explore the possibility of cooperation” with respect to EASA-UK CAA relations, but nothing has been passed in Europe to address certificates from the UK. The current EU-UK Withdrawal Agreement appears to render the EU Brexit Regulation moot, but if that is true then it means that there is no clear guidance on what happens after the transition period, particularly if the EU withdraws its offer to exetend US aviation regulations to the UK.

While the UK CAA is quite competent to support its own airworthiness needs, if the EU will not recognize UK CAA certificates after December 31, 2020 then this becomes a problem in terms of being able to support the EU-registered fleet. It potentially devalues aircraft components or complicates the compliance path in uncertain ways.

During the 2020 transition period, EASA continues to process applications from existing UK CAA approval holder within the context of the early application process; EASA expects to issue EASA certificates to many businesses who currently hold UK CAA certificates. 

What Comes Next?

A “Hard Brexit” scenario is still a very real possibility. This is because the UK is setting early deadlines for concluding a long-term agreement (October 15) and the UK Prime Minister has indicated that he’s prepared to walk away from trade talks rather than compromise on what he regards as core principles of Brexit. The “Irish Backstop” concerns reflect a very delicate point because of the competing concerns between fully withdrawing from the EU Common Market and retaining a “soft border” between Ireland and Northern Ireland.

Because of the lack of clarity on “what happens next,” anything is possible but it is highly likely that the EU will simply reissue the EU Brexit Regulation, or possibly rule that it became once again “live” upon the expiration of the transitional Withdrawal Agreement. If this happens then it would create a new transition during which UK parties could decide whether they needed EU recognition or whether UK recognition was sufficient (the UK already has a number of bilateral agreements ready-to-go in order to facilitate international recognition of UK certifications).  This means that it is likely that (1) the EU would recognize the validity of components already on EU aircraft [components would not have to be removed from aircraft], and (2) components with a EASA Form 1 certificates of release issued by UK-registered businesses prior to the end of the transition period would very likely be recognized as airworthy after the transition period.

For the UK CAA, it has already announced that anything certified under EASA’s authority that was considered preemptively airworthy before the end of the transition period would continue to be recognized in the UK for at least two years after the transition period ends..

An ‘even harder Brexit‘ is also a possibility, in which the EU simply stops recognizing all UK-CAA certificates (including EASA Form 1) after December 31, 2020. While possible, this is unlikely because of the adverse effect it would have on maintaining the technical airworthiness of EU-registered aircraft. If this happened, then In such a case, distributors holding parts with UK CAA Certificates might not be able to sell them for installation on EU-registered aircraft, but they could still be installed on UK-registered aircraft and on the aircraft registered in the nations with which the UK CAA has appropriate bilateral agreements (like Canada, Japan and the United States).

But there are about four weeks remaining before the current UK negotiation deadline, so a “soft Brexit” – in which UK CAA either participates as a third-country member of EASA or otherwise enters into a deal with EASA for mutual recognition – still remains a real possibility. In such a case, distributors holding parts with UK CAA Certificates would enjoy a “status-quo” situation.

EASA still is restrained from publicly commenting on Brexit; they are waiting for the high-level political negotiations to conclude before they can start to expending resources and take an official position.  Nonetheless, EASA contacts have privately assured us that EASA is ready for any direction in which Brexit may go, and EASA hopes to be able to to implement some form of mutual reliance with the UK CAA.

WTO Rules Against US Tariffs (including Aircraft Parts)

The WTO issued a ruling against the United States’ punitive tariffs on Chinese goods, but it might not change the 25% duty rate on aircraft parts imported from China.

The United States imposed punitive tariffs on a variety of goods imported from China, including aircraft parts. The duty on aircraft parts from China was 25% of their value (even though typically aircraft parts are imported duty-free under the harmonized tariff schedules).

The World Trade Organization (WTO) released a ruling today that concluded that the tariffs were inconsistent with the General Agreement on Tariffs and Trade (to which the United States is a signatory).

This does not necessarily mean that the tariffs will be revoked! The United States may appeal this ruling, which could suspend application of the ruling.

The U.S. Trade Representative has objected to the WTO Appellate Body, claiming that it has failed to follow agreed-upon rules. In 2016 (during President Obama’s term) the United States blocked the appointment of a WTO Appellate Body judge. The Administration of President Trump has continued this practice and it now appears that the United States’ blockage will result in the body being unable to conduct business. Which could mean that a US appeal would never be heard. rendering the WTO ruling effectively moot.

So keep paying those tariffs for imports – at least until you hear that the law has changed!

%d bloggers like this: