Hoping to pressure Harley-Davidson into keeping its production in the United States, President Trump this weekend tweeted words of encouragement to riders who planned to boycott the American motorcycle brand. This shouldn’t be too surprising, considering that Harley-Davidson has increasingly found itself at odds with the White House, primarily over President Trump’s trade negotiations and agreements. The tension started with the United States withdrawing from the Trans-Pacific Partnership (TPP) trade agreement, and reached a boiling point when President Trump imposed tariffs on aluminum and steel. Now with Harley-Davidson signaling its plans to create a new business plan for the 21st century, the Trump Administration is increasing the pressure for Harley-Davidson to maintain the status quo.
The Japanese automotive industry is being rocked by an emissions and fuel efficiency scandal right now, and it involves the Yamaha Motor Company motorcycle division as well. All told, five of the eight automotive companies in Japan have been found incorrectly testing and reporting the emissions and fuel mileage of their vehicles. The scandal started in 2016 with Mitsubishi, which lead to findings last year where Nissan and Subaru were found manipulating the results of their emission results. These findings then caused the Japanese government to require other automotive companies in Japan to check their testing operations. Upon this internal review, Mazda and Suzuki found and reported that their cars had been improperly tested, with Yamaha finding similar results with its motorcycle standards testing.
Elected on a platform to do away with regulatory interference, especially Obama-era fuel economy targets, the Trump Administration is now looking to end California’s waiver under the Clean Air Act.
Ending the waiver effectively means that the United States would finally have a unified set of regulations for vehicles emissions and fuel efficiency standards, as California (through the California Air Resources Board) often sets higher requirements, through its Clean Air Act waiver.
Looking to gut the regulatory force of CARB, this news would also mean that vehicle makers would have lower targets to hit for gas mileage efficiency (37mpg instead of 46.8mpg), which in turn means that brands would have to sell fewer electric vehicles as well.
Lastly, under the proposed changes, vehicle emission standards would freeze at the planned 2020 levels, until the year 2026.
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.
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.
I often berate the Motorcycle Industry Council (MIC) for not doing enough to promote and protect motorcycle riding in the United States, but we also have to give credit where credit is due, and the MIC is due a little credit for a change.
Working in conjunction with the Congressional Motorcycle Caucus, the MIC hosted a briefing titled “Intelligent Transportation Systems and Automated Vehicle Applications Impacts on Motorcycle Safety,” which focused on vehicle-to-vehicle technologies, and how they apply to motorcycles.
The briefing featured a panel of industry and research experts on the issue: Sam Campbell, BMW Group; Gary Higgins, American Honda Motor Company, Inc.; Shane McLaughlin, Virginia Tech Transportation Institute; and Eric Teoh, Insurance Institute for Highway Safety.
Every year the Governors Highway Safety Association (GHSA) releases data about motorcycle fatalities in the United States. The results are never that surprising, and despite some fluctuations year-to-year, the basic takeaways are always the same. Motorcyclists are way more likely to die (28x more likely per mile traveled) than automobile drivers and passengers; fatal motorcycle crashes are more likely to involve alcohol than other vehicle fatalities (25% vs. 21% for passenger cars); and motorcycle fatalities closely correlate to new motorcycle sales. The figures are of course important, but reporting the results is an exercise in playing a broken record, over and over again. Except for one statistic that caught our eye this year: motorcycle fatalities as a percentage of overall vehicle fatalities.
The United Kingdom has a new law, requiring companies with 250 or more employees to report to the authorities the earnings of its workers, by gender. The topic has been a sticking point in the British news cycle right now, with woman across the company showing median earnings that are 12% lower than men, which is a sizable gap in income equality. Where does the British motorcycle industry falls into place in all this? Well as Visordown initially reported, that is more difficult to say, as it appears that only Triumph Motorcycles meets the reporting criteria, amongst motorcycle manufacturers. Technically, it is two brands that meet reporting criteria for gender pay gap, as Triumph Motorcycles Limited and Triumph Designs Limited split their duties for the British marque.
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.