On April 19, 2021 Harley-Davidson received notification from the Economic Ministry of Belgium that The Motor Company would be "subject to the revocation of Binding Origin Information (BOI) credentials." Since 2019, the company has operated with BOI regulatory credentials, allowing it to supply its EU markets with certain motorcycles produced at its international manufacturing facilities at tariff rates of 6%. No more!
"This is an unprecedented situation and underscores the very real harm of an escalating trade war to our stakeholders on both sides of the Atlantic," says Harley CEO Jochen Zeitz of what amounts to a whopping 50% increase in tariffs. "The potential impact of this decision on our manufacturing, operations and overall ability to compete in Europe is significant. Imposing an import tariff on all Harley-Davidson motorcycles goes against all notions of free trade and, if implemented, these increased tariffs will pose a targeted competitive disadvantage for our products, against those of our European competitors."
In 2018, the European Union had placed a 25% incremental tariff (31% total tariff) on motorcycles imported into the European Union from the U.S., including Harley-Davidson motorcycles. This tariff became effective June 22, 2018. The tariff is scheduled to increase to a 50% incremental tariff (56% total tariff) effective June 1, 2021.
The EUs new ruling will apply to the entire Harley-Davidson product portfolio and will effectively prohibit the company from functioning competitively in Europe. As of June 2021, all Harley-Davidson products, regardless of origin, will be subject to a 56% import tariff within the E.U.
Meanwhile, European OEMs, including motorcycle manufacturers, will continue operations with significantly lower import tariffs to the U.S. ranging from 1.2% for up to 800cc products to 2.4% for over 800cc products, and with automobiles at 2.5%.
Stay tuned...