The motorcycle industry in Europe is on-track to have its fifth-straight year of growth, as registrations are up 8.2% so far in 2018.
As of yesterday, JEFTA is finally law in Europe and Japan, and the trade agreement is a big deal for both parties involved, as well as motorcyclists. What? You haven’t heard of the Japan Europe Free Trade Agreement (JEFTA)? For our European readers, it is a critical piece of legislation, as this treaty of trade is set to make Japanese motorcycles a bit cheaper in Europe. Agreeing to a schedule of tariff reductions, JEFTA achieves two goals that affect the motorcycle industry. First, it reduces the modest taxation of Japanese motorcycles, mopeds, scooters, and parts into the European Union. Second, JEFTA helps align the European and Japanese emission standards for vehicles, thus unifying both countries under a single emission criteria for vehicles.
President Trump’s trade war is about to see another player in the motorcycle industry jump ship from American soil, and this time it is heavyweight Polaris Industries. According to a report by the Minneapolis/St. Paul Business Journal, Polaris is considering moving some of its production capacity to Europe, eyeing a production facility in Poland that would build units for the European market. The move is a direct response to the retaliatory tariffs imposed by the European Union on motorcycle imports, which itself was a response to the Trump Administration’s taxing of steel and aluminum imports.
We have already reported on the European Union’s 25% tariff increase (6% to 31%) on American-made motorcycles, and how those import taxes are going to affect in particular Harley-Davidson. The short version: not well. Seeing that writing on the wall, Harley-Davidson has responded to Europe’s retaliatory tariffs, though it is perhaps not the response that the American government was hoping for when it began taxing aluminum and steel from European Union member states. As such, Harley-Davidson plans to shift its production for motorcycles destined to the European market from its factories in the United States to it facilities abroad.
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.
If you haven’t heard of the Trump administration’s plan to impose sizable tariffs on steel and aluminum (25% and 10%, respectively), then you have done a remarkably good job of ignoring current political events.
Trump’s plan caught many by surprise, and the details of the tariffs are still forming, but one thing is clear: it doesn’t bode well for Harley-Davidson.
Like most manufacturers, an increase on raw steel and aluminum will mean an increase in costs, but Harley-Davidson also has the dubious honor of being part of the European Union’s focus for retaliation.
This is because the EU says it will tax motorcycle imports from the United States, in retaliation for Trump’s tariffs on steel and aluminum.
Surprisingly, Harley-Davidson has been quiet about all these maneuvers in the political space…until now, that is.
A verdict has finally been reach in the German patent law dispute between Alpinestars and Dainese, concerning their respective airbag suit technologies. In the ruling, the “Landgericht” court in Munich found that Alpinestars violated two Dainese patents concerning its D-Air technology, and thus issued a verdict that sees Alpinestars forbidden from selling its Tech-Air products in Germany. Alpinestars will also have to pay Dainese restitution for damages incurred from Alpinestars selling Tech-Air products in Germany. The monetary amount of the damages will depend on how much Tech-Air product the Italian firm sold in Germany, which has yet to be determined. After the verdict, both companies issued press releases touting their side of the patent dispute story, with clearly no love lost between the two parties.
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.
What do chickens have to do with potatoes? For that matter, what do chickens have to do with steel? And what do both of those things have to do with tires? The answer isn’t as obvious as you may think, and this week everyone in the motorcycle industry is asking themselves what European motorcycles have to do with beef exports. The answer to all these questions is the same though, and it involves the rather unsophisticated motorcycle industry being dragged into the rather complex world of international trade negotiation. Let me explain. What’s the beef? You see for nearly 30 years now, the United States has been battling with the European Union over the prohibition of hormone-raised beef being sold on the European market.
Reading motorsports websites all over Europe recently, you would think it was Doomsday for motorcycle racing, and all forms of motorized sports.
Even in as august a publication as The Times (of London, that is), the headlines warned of impending disaster:. “EU insurance rule ‘will destroy British motor sport’“. Is the end nigh for motorsport in Britain?
The short answer is “No, but it’s complicated”. So where did these warnings that the sky is falling come from?
On Wednesday, the MCIA (the Motorcycle Industry Association, the body representing the British bike industry), the ACU, and the AMCA (both representing motorcycle racing, on road and off road) issued a joint press release, warning that motorsport in the UK could come to an end due to a ruling by the European Court in Luxembourg.
The ruling stems from a judgment in the case of Vnuk v. Triglav, case C-162/13 before the European Court of Justice, and known as the Vnuk judgment. The case involved a Slovenian farm worker, Damijan Vnuk, who was injured when he was knocked off a ladder by a tractor reversing with a trailer.
Vnuk was working on a farm at the time, and sued for compensation from the motor vehicle insurance policy of the tractor. The lower Slovenian courts rejected his claims, but the Slovenian Supreme Court referred the case to the ECJ.
Coverage of Brexit, the United Kingdom’s referendum whether to continue as a member of the European Union, has largely been ignored in the United States, and it certainly hasn’t been a blip on the radar recently within our microcosm of the motorcycle industry. But of course, the United Kingdom’s place in the European Union will have far-reaching consequences, even in our beloved little two-wheeled world. There is a lot of politics at play here, and I don’t care to rehash it, other than to say that it could be a foreshadow of what could come soon in the United States as well. What I do have to say though is an examination of how the United Kingdom leaving the European Union can and will affect the world of motorcycling.