In a significant development, the European Union (EU) has reduced retaliatory duties on some US-made jeans, but will still impose a rate on top of regular duties as part of an ongoing and long-running trade dispute between Washington and Brussels. From May 1 the EU retaliatory tariffs on a number of US-made products including women's and girls' jeans (HTS 6204.62.31) will fall from 1.5 per cent to 0.45 per cent.

This rate is levied on top of regular duties and comes in response to payments the US makes to domestic industries to distribute antidumping duties collected on foreign-made goods. The tariff hike was authorised against the US by the World Trade Organization (WTO) for being in violation of its international trade obligations for failing to fully comply with a ruling against the Continued Dumping and Subsidy Offset Act of 2000.

Known as the Byrd Amendment, this law allowed American companies who complained about unfairly traded goods to receive payment from the additional duties collected by the US.The law was found to be a violation of WTO rules and, despite a repeal in 2005, its distributions were allowed to continue for entries of goods made before 1 October 2007. As a result, the WTO allows other countries to raise tariffs on goods imported from the US up to a certain amount, which varies each year.