European Union Tariffs on US Motorcycles Begin Today

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Today is the day. Today is the day that the European Union begins taxing the importation of motorcycles from the United States into Europe.

A retaliation to the Trump administration’s tariffs on aluminum and steel, the EU will now impose a 25% tariff increase on all motorcycles, 500cc and up, coming from the United States.

This means that the new tariff provisions will affect both Harley-Davidson and Indian, but will not affect Zero Motorcycles, as electric motorcycles are not included in the trade war provisions.

Specifically, the European Union is imposing the 31% tariff (there was already a 6% tariff on motorcycles from the USA) to the goods that fall under HS code 87114000 & 87115000 on the Harmonized Commodity Description and Coding System.

  • 87114000: Motorcycles, incl. mopeds, with reciprocating internal combustion piston engine of a cylinder capacity > 500 cm3 but <= 800 cm3
  • 87115000: Motorcycles, incl. mopeds, with reciprocating internal combustion piston engine of a cylinder capacity > 800 cm3

Of course, these new tariffs will affect US brands differently. In the motorcycle industry, today’s tariffs will by far affect Harley-Davidson more than they do the Indian Motorcycle Co.

Harley-Davidson sells just under 40,000 motorcycles a year in the European Union, compared to the 148,000 bikes that the American brand sold in the United States last year. 

This is of course accounted for by the European Union. This is because Europe’s retaliatory tariffs are designed to affect only certain regions of the United States, more specifically those in the districts of key politicians and key swing counties from the last election.

In the case of Harley-Davidson, the Bar & Shield brand is of course based out of Milwaukee, Wisconsin – and Wisconsin just happens to be the home state of Speaker of the House of Representatives Paul Ryan.

It’s not clear how long Europe will impose tariffs on US motorcycles (likely for as long as the US taxes steel and aluminum from Europe), but the timing couldn’t be worse for Harley-Davidson.

Sales in America for Harley-Davidson have been shrinking since 2017 (not counting the massive reduction in sales from the Great Recession), leaving the American brand to depend on foreign sales for growth and stability.

Adding a 25% tariff now to Harley-Davidson sales in Europe will certainly put a dent in that trend, and it will undoubtedly affect Harley-Davidson’s bottom line.

As for Indian, the tariffs likely mean very little. The upstart brand is still growing by adding new dealers and new models, and most of that growth (roughly 70%) is focused inside the United States.

Source: European Union