The motorcycle industry is still deep in the throes of trying to prevent the United States Trade Representative (USTR) from taxing small-displacement motorcycles from Europe with a 100% tariff.
The proposed tariff would double the cost of any two-wheeled vehicle manufactured in Europe, with displacements between 51cc and 500cc , but the real kicker is that the proposed tariff isn’t really about motorcycles…it’s about beef.
For roughly 30 years now, the United States (one of the largest producers of beef) has been trying to gain access to the European market, but the EU bans beef that has been grown with hormones, because of health concerns (the ban also has the nice side-effect of protecting European beef growers).
To put pressure on the European Union, the beef industry (through lobbying the USTR) has proposed a number of retaliatory tariffs on European imports in the USA, motorcycles being one of them. Welcome to International Trade 101.
However, a major breakthrough happened last week, one that could affect this bovine standoff, and it has to with Chinese chicken.
From Beak to Hoof
Though not quite as intense as the Euro-American standoff over beef, the Sino-American back-and-forth over chicken…which also has to do with beef (are we sensing a trend here, yet?)…has certainly been a hot topic in Pan-Pacific relations.
It all started 13 years ago, when beef exports to China were cutoff, after a case of mad cow disease was discovered in the United States. This incident actually involved a Canadian cow, but I digress.
Since then, US beef growers have been anxious to get back into the Chinese market – one of the largest single beef markets in the world, valued at $2.5 billion. Opening up the Chinese beef market could potentially increase the US beef industry by 30%.
To facilitate that goal, beef farmers pressured the USTR into banning the importation of Chinese chicken into the United States. Again, this is a narrative that should sound familiar to motorcyclists.
Last week though, this all changed, with China and the United States announcing a new trade agreement that will see American beef imported into China, and fully cooked chickens imported into the United States. There’s a whole mess of reasons for this arrangement, if you’re inclined to learn more.
What this has to do with the motorcycle industry though, is more basic than the implications it has for Sino-American relations. Quite simply, it relieves some pressure on the USTR to get American beef into the European Union.
A win with the Chinese over beef imports means that the herculean task faced with importing beef into the European Union becomes less important to US beef producers, which is good news for European motorcycle manufacturers.
Beef consumption is on a slow decline, down roughly 40% since its high in 1976. This has forced the American beef industry to look for growth outside of the United States – markets like the European Union, China, and other developing countries.
Being allowed to sell beef in China would be a massive boost for the American beef industry, enough so that the USTR could be persuaded to leave Europe for another day, which would mean that the USTR can walk itself of the ledge its made for the United States and European motorcycles.
Undoubtedly, at some point in time the US beef industry will need the European market to maintain volume numbers, but markets like China (and others in Asia) are far more important, especially as Western tastes continue to favor the consumption of poultry.
It should be noted, that the main reason beef consumption in the United States has been dropping, is because of the increase in poultry consumption…which makes you wonder if it is really in the beef industry’s best interest to make concessions on chicken trade, but that’s a story for a different blog.
For those interested in taking action, you will be happy to learn that the American Motorcyclist Association (AMA) is up in arms over this issue, and is urging its members to leave comment about the USTR proposal – demanding the removal of European motorcycles from the proposed tariffs list.