Harley-Davidson stung with massive tax hike as US bikes face 56% EU import tariff
Harley-Davidson could face ruin in Europe in less than two month’s time after being slapped with a whopping 833% increase in tariffs. The rise in duty is the latest fallout from an escalating trade war between the old sparring partners of the United States and the European Union.
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In June 2018, the EU placed a 25% incremental tariff (31% total) on motorcycles imported into the EU from the US. The tariff is scheduled to increase to 50% incremental (56% total) on June 1. Since June 2019, Harley have been able to escape most of the tariff due to Binding Origin Information (BOI) credentials. The result is that certain Harleys produced at their international manufacturing facilities have been subject to just 6% tariffs.
However, Harley have since been told by the EU that after a decision by the European Commission their BOI credentials have been revoked. This means that from June 1, the full 56% tariffs will be implemented on all products, regardless of origin. For reference, European bikes imported into the US are subject to tariffs ranging from 1.2% to 2.4% depending on displacement.
"This is an unprecedented situation and underscores the very real harm of an escalating trade war to our stakeholders on both sides of the Atlantic," said Jochen Zeits, CEO of Harley-Davidson.
"The potential impact of this decision on our manufacturing, operations and overall ability to compete in Europe is significant. Imposing an import tariff on all Harley-Davidson motorcycles goes against all notions of free trade and, if implemented, these increased tariffs will pose a targeted competitive disadvantage for our products, against those of our European competitors."
The irony of this situation should not be lost on H-D. In 1983, President Ronald Reagan enacted a 1000% increase in tariffs on Japanese motorcycles to help protect the domestic market of which there was just one major manufacturer at the time: Harley-Davidson.