Global – Who would have thought we would be reporting on global political issues, as America (or rather their President) announces the prospect of import tariffs that has drawn promised retaliation from the Europe Union.
Last week the US President announced plans to raise tariffs on imported steel (25%) and aluminium (10%), including steel and aluminium from Europe the duty to be formally set this week, with the President ready to fight back as a tit for tat trade war looms, as the European Union promises to act firmly against any tariffs.
How is Harley-Davidson drawn into this threat of a trade war? Well in response to this and leading the fray was comments by European Commission President Jean-Claude Juncker, “So now we will also impose import tariffs. This is basically a stupid process, the fact that we have to do this. But we have to do it. We will now impose tariffs on motorcycles, Harley Davidson, on blue jeans, Levis, on Bourbon. We can also do stupid. We also have to be this stupid!“
According to this article – Will Harley-Davidson get caught up in a trade war? – “Another company that could be hurt far worse than Harley-Davidson is the North American arm of Royal Enfield, which is led by a former Harley executive. Royal Enfield has announced new models and has big plans to expand its presence in the United States, but all that could be wiped out overnight if the United States imposes a punitive tariff on Indian motorcycles.” with the American President already mentioning the idea.
While a lot plays out on the chosen means of communication in the short sentences of the American President, with Canada and Mexico for the moment, possibly being exempted, threats to impose this tariff on cars manufactured in Europe. The European Commission in bloc has stated, “We still hope, as a USA security partner, that the EU would be excluded. We also hope to convince the US administration that this is not the right move. As no decision has been taken yet, no formal action has been taken by the European Union. But we have made clear that if a move like this is taken, it will hurt the European Union. It will put thousands of European jobs in jeopardy and it has to be met by firm and proportionate response.”
Motorcycling Reaction
As one can imagine the motorcycle industry in Europe represented by ACEM and the UK motorcycle industry – MCIA – have both expressed deep concerns, along with the European rider organisation the Federation of European Motorcyclists Associations (FEMA).
President of ACEM Stefan Pierer, also CEO of KTM AG said: “Motorcycle companies are global players committed to free and balanced trade agreements. The US and the EU should be working together to facilitate international trade and regulatory convergence, not to restrict it by adopting unilateral and politically motivated measures”.
Antonio Perlot, ACEM Secretary General, said: “The EU is a key market for American motorcycle brands. But the US is also Europe’s first trading partner in the motorcycle segment. We trust that American and European authorities will avoid triggering a global trade escalation, which, could be extremely damaging for the motorcycle industry on both sides of the Atlantic”.
MCIA says it has written to the UK Government expressing the industry’s concern regarding a potential trade war following the U.S President’s announcement to significantly increase tariffs on steel and aluminium imports to the U.S.
MCIA states, “The EU Commission has prepared retaliatory counter measures, which if initiated, have an extremely high risk of negatively impacting a number of MCIA member companies.
Should the situation escalate, there is a strong possibility that the European and UK market will suffer significant damage at a time when Brexit brings enough uncertainty and challenge to the economy.”
FEMA’s General Secretary Dolf Willigers stated, “Imposing sanctions or import taxes on Harley-Davidsons will not just hurt Americans and American industry, it will also hurt European motorcycle businesses, their workers and the families of those workers. People could lose their jobs and families could lose their income if Harley-Davidsons become too expensive to sell.”
Adding, “FEMA will send a letter to Jean-Claude Juncker this week to warn against these plans. If misters Juncker and Trump want to have a fight – or a trade war – it should not be at the expense of the motorcycling community.”
This is not the first time that motorcycles, particularly Harley-Davison has been threatened or have tariffs introduced into trade wars.
In 1983 during the President Reagan administration, in order to protect the Harley-Davidson Motor Company of Milwaukee, then sole surviving manufacturer of motorcycles in America, introduced an increase in tariffs for imported heavyweight motorcycles, which mainly affected Japanese manufacturers.
In 2002 President George W Bush imposed tariffs of up to 30% on imported steel to America. The EU retaliated with plans of tariffs, which included Harley-Davidson motorcycles.
Then there was last year’s trade battle with beef – AMA – What’s The Beef? – the Office of United States Trade Representative (USTR) took into consideration the imposition of increased duties from the EU which included:
- Motorcycles (incl. mopeds) and cycles, fitted with reciprocating internal-combustion piston engine with cylinder capacity of over 50 cc but not over 250 cc.
- Motorcycles (incl. mopeds) and cycles, fitted with reciprocating internal-combustion piston engine with cylinder capacity of over 250 cc but not over 500 cc.
Theses tariffs and other were because the EU bans the import of beef and beef products produced from animals to which any of six hormones have been administered for growth-promotion purposes, effectively this prohibits the import of all but specially-produced U.S. beef and beef products.
With Harley-Davison caught up in this threatened global trade war with the EU and the US – along with Bourbon Whiskey – even drowning your sorrows if you are a Harley-Davidson fan could get more expensive.
Sources
FEMA – ‘Europe will have to impose an import tax on Harley-Davidsons’
MCIA – UK Motorcycle Industry Association tells UK Government US/EU trade war will harm motorcycle industry
RevZilla – Lance Oliver – Will Harley-Davidson get caught up in a trade war?
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