American motorcycle manufacturer Harley HOG -1.2%-Davidson will launch an immediate appeal after being stung by a crippling European Union tariff of 56%.
Sales of the distinctively warbling two-cylinder bikes have been subject to a 6% tariff, but the Economic Ministry of Belgium notified Harley-Davidson that its tariff status has changed, effective from June this year.
The Milwaukee-based company’s tariff rate has changed because the EU has revoked its Binding Origin Information (BOI) credentials, with immediate effect.
“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,” Chief Executive Jochen Zeitz said in a statement.
“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.”
(Despite the impassioned statement, this is the same Harley-Davidson that applied to the US Tariff Commission for a 40% import tax on motorcycles in 1952.)
The BOI credentials allowed Harley to operate at the lower tariff with bikes from its international plants, but their removal creates a crisis for the brand.
In June, 2018, the EU levied a 25% incremental tariff on motorcycles imported from the EU. It now sits at 31% and is slated to reach 50% on June 1, 2021.
On the flip side, the United States import tariffs on European motorbike makers, ranging from Ducati to BMW, sit at 1.2% for engines of up to 800CC and 2.4% for larger engines.
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