by Rick Barrett from https://www.jsonline.com
Harley-Davidson hit with 56% EU tariff, an ‘unprecedented situation’ that will block the motorcycle maker from the market, CEO says
Harley-Davidson Inc. has been slapped with a 56% European Union tariff on all its motorcycles, the company said Monday, effectively blocking it from the EU market.
Harley said it would appeal the ruling scheduled to go into effect in June.
“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. The potential impact of this decision on our manufacturing operations and overall ability to compete in Europe is significant,” Jochen Zeitz, Harley chairman, president and CEO, said in a statement.
Europe is Harley’s second largest market after the United States.
“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,” Zeitz added.
In 2018, the European Union placed a 25% incremental tariff (31% total tariff) on motorcycles imported into the EU from the United States.
Under the latest proposal, the EU would place a 50% incremental tariff on U.S. motorcycles for a total tariff of 56%. The ruling would even apply to Harleys manufactured in Thailand, where the company had set up operations to get around the 2018 EU tariff.
Monday, Harley posted a quarterly profit of $259 million, or $1.68 a share, up from $70 million, or 45 cents a share, in the year-earlier period.
Revenue rose to $1.4 billion from $1.3 billion a year earlier.
“The actions we have taken to reshape the business are having a positive impact on our results, especially for our most important North American region,” Zeitz said.
Harley-Davidson shares closed Monday up $3.91 a share, or nearly 10%, on Monday to $44.29.
Harley-Davidson To Vigorously Defend Itself Following Aggressive EU Tariff Ruling – Quick Facts
Harley-Davidson, Inc. (HOG) announced Monday that it has received notification from the Economic Ministry of Belgium that it would be subject to the revocation of Binding Origin Information (BOI) credentials, effective April 19, 2021, following a request from the European Union (EU).
Harley-Davidson said it will be lodging an immediate legal challenge to this decision.
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%.
The EU’s new ruling will apply to the entire Harley-Davidson product portfolio and will effectively prohibit the company from functioning competitively in Europe.
From June 2021, all Harley-Davidson products, regardless of origin, will be subject to a 56% import tariff within the EU.
In 2018, the European Union placed a 25% incremental tariff (31% total tariff) on motorcycles imported into the EU from the U.S., effective June 22, 2018. The tariff is scheduled to increase to a 50% incremental tariff (56% total tariff) effective June 1, 2021.
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%.
Harley-Davidson Hit With EU Tariff Ruling
by Alistair MacDonald from https://www.wsj.com
Motorcycle maker says ruling would subject its products to 56% import tariff within the EU.
Harley-Davidson Inc. has been hit with a European Union import ruling that the motorcycle maker says would impose an import tariff of 56% on its products and keep it from functioning competitively in Europe.
The Milwaukee-based company announced the ruling along with better-than-expected sales and profit for the first quarter, news of which lifted the stock to a new multiyear high.
Harley-Davidson has been one of the highest-profile U.S. casualties of recent trade disputes, after the EU put a 25% duty on its bikes and other U.S. goods in 2018. Those levies were a response to tariffs the Trump administration imposed on steel and aluminum from producers in Europe and elsewhere.
On Monday, Harley-Davidson said Belgium’s Economic Ministry, on behalf of the EU, had notified the company that it was revoking an agreement that allowed the business to supply Europe with certain motorcycles produced at its international manufacturing facilities at tariff rates of 6%.
Harley-Davidson said the EU ruling would apply to its entire lineup and subject all products—regardless of origin—to a 56% import tariff within the trade bloc beginning June 1.