Just as it brings a new adventure bike to market, its most significant product launch in years, Harley-Davidson has been hit by an unexpected blow. The European Union has announced plans for a 56 percent tariff on all MoCo products, which would come into effect starting in June 2021.
It’s a big hike, one that will drive the price of Harley-Davidsons sky-high. It makes Harley-Davidson’s existing EU problem even worse. Currently, the European Union has a 31 percent tariff on American-built Harley-Davidson products, which has been climbing since 2018, when the EU put a 25 percent tariff on Harley-Davidson’s machines. H-D’s Euro sales took a hit then, and have been stuck in recovery mode ever since. The timing couldn’t have been worse for Harley-Davidson, as the company was looking to aggressively expand overseas. The EU tariff put a big dent in those plans, by making its motorcycles more expensive.
At that time, Harley-Davidson circumvented the EU’s tariff by selling bikes made in its overseas plants to Euro customers. Remember, Harley-Davidson has several overseas factories, making it easy to sell bikes from those plants in Europe, with a lower 6 percent tariff. Now, the EU says that loophole is closing. All bikes will be taxed as though they were built in North America.
Once again, the timing is terrible for the MoCo. Harley-Davidson is working on a bold new plan—a move into a whole new market segment, with the Pan America adventure bike. That’s potentially bad news for the European motorcycle manufacturing industry, which has been making a lot of money off big ADV bike sales for the past few decades. New made-in-America competition could make a dent in those tasty tendies.
Or maybe it’s all just a coincidence? Who knows, but if someone thought Harley-Davidson’s tariff problems would go away with the latest American regime change, it seems they were wrong.
Harley-Davidson is appealing the tariff, as you’d expect, particularly since the EU’s machines don’t face similarly high tariffs when coming to the US. Maybe that will change in coming weeks?