Harley released what was good news on Monday, to deliver better than expected results for the first quarterExcept Harley also said at the time that his entire business model in Europe could be completely broken.
That’s because of tariffs that are a legacy of the Trump administration, which unnecessarily started a trade war with Europe and caught Harley in the crossfire in the form of higher rates on US motorcycles. Harley initially thought it had a solution, through instead, sending motorcycles it built in Thailand to Europe
But Harley said Monday that a new ruling by the European Union meant that this solution will apparently no longer work. Emphasis on Harleys first, then mine:
Harley-Davidson will immediately file a legal complaint against this decision.
Since 2019, the company has been working with BOI legal credentials, enabling it to supply its EU markets with certain motorcycles produced in its international manufacturing facilities at rates of 6%.
The new EU ruling will apply to Harley-Davidson’s entire product portfolio and effectively prohibit the company from operating competitively in Europe. From June 2021, all Harley-Davidson products, regardless of origin, will be subject to a 56% import tariff within the EU
European OEMs, including motorcycle manufacturers, will continue their business with significantly lower import tariffs to the US, ranging from 1.2% for products up to 800 cc to 2.4% for products over 800 cc, and with cars at 2.5% .
The Wall Street Journal, meanwhile, reports that Harley was notified of the ruling late on Friday, which must have been an unpleasant surprise.
“This is an unprecedented situation and underscores the very real damage of an escalating trade war to our stakeholders on both sides of the Atlantic,” Jochen Zeitz, Harley-Davidson’s chairman, said in a statement. “The potential impact of this decision on our manufacturing, operations and overall competitiveness in Europe is significant. Imposing an import tariff on all Harley-Davidson motorcycles is against all notions of free trade and, if implemented, these increased tariffs will put our products at a targeted competitive disadvantage over those of our European competitors. “
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One of the first things Harley did after Trump was inaugurated was visit the White House, but that relationship quickly became very complicated, and today I suspect that Harley regrets more than a fewbecause now Trump’s decisions have now put Harley on the brink of disaster.
Europe is believed to be one of Harley’s most important markets after the CEO said it would happen last year exits some markets and focus more on the US, Europe and Asia PacificAnd yet this is also the kind of thing that Harley is supposed to be pays lobbyists to help fix it, and I wouldn’t be surprised if Harley were eventually able to negotiate some sort of deal to stay competitive in Europe. Because Europe would certainly prefer to have Harley in some capacity rather than not at all.