Harley-Davidson Warns of Trade War with EU Following Huge Tariff Increase

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Just as Chief Executive Jochen Zeitz was announcing “strong financial results” for the first quarter of 2021, Harley-Davidson faces a serious blow. The European tariff for all of their products is now increased to an all-time high of 56%. But the all-American motorcycle brand is not about to submit to that.
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It looks like Harley-Davidson gets all the love, but not from EU officials. It probably came as a surprise to the entire industry when news broke out that European Union’s new ruling drastically increases import tariffs for Harley, by revoking the previous Binding Origin Information (BOI) credentials.

These credentials allowed lower tariffs for Harley products that were manufactured outside of the U.S., at their international plants. And even the U.S.-manufactured ones did not have such a harsh tariff, at 31%. But now, with this new ruling, all Harleys, regardless of where they are built, are submitted to the same 56% tariff. On the other hand, the current U.S. tariff for European motorcycles is a maximum of 2,4%.

At the request of the E.U., the Belgian Economic Minister revoked the BOI credentials and the new incremental tariff is set to become effective as soon as June 1, 2021.

However, Harley is already fighting back, announcing their intention to appeal this decision.

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.” – said Jochen Zeitz.

According to their official statement, Harley-Davidson believes that this EU ruling would create an unfair discrepancy between them and European motorcycle manufacturers and would actively prevent Harley products from reaching the European market. Going even further, they are calling the decision “unprecedented”, with a real risk of escalating into a “trade war” between the U.S. and the EU.

It’s not the first time when these two major trade competitors have collided over the issue of import tariffs and Harley got caught in the middle. Back in 2018, the EU imposed a 31% total tariff on all motorcycles imported from the U.S. And now, only three years later, it’s increasing it to 56%.

It will be interesting to see whether Harley’s legal action will overturn this European ruling or whether a trade conflict is about to blow up.