US-EU trade dispute threatens motorcycle pricing

The United States has a beef with the European Union when it comes to trade, with hormones on the rampage and motorcycles are getting caught in the crossfire. 

The United States seeks to punish the European Union by raising the import tax on a selection of products from Europe, including strangely enough motorcycles which are unrelated to the original dispute. The tit-for-tat is potentially damaging to both economies and could possibly lead to an escalating set of trade restrictions.

The move comes despite a similar proposal being blocked in 2008 by concerned motorcycling groups, with the livelihoods of manufacturers and small and medium sized businesses like dealerships and related shops on the line. Possible escalation could even include a similar system targeting American motorcycles heading to sale in the EU introduced, with Harley-Davidson selling 37,000 models in the EU market last year.

Vespa GTS Touring 300
Brands like Vespa would be effected with their small capacity model range.

The cause is the European Union bans the import of American beef and beef products produced from animals that have been given growth hormones.

The Office of United States Trade Representative proposes to add import tax on motorcycles with an engine size between 51cc and 500cc imported from the European Union, which could be as high as 100 percent, and is the latest U.S. retaliation in a long-standing agricultural trade dispute between the United States and the EU concerning beef hormones.

American Motorcyclist Association (AMA) statement

“Trade disputes residing within the boundaries of the agricultural industry should not be solved with trade sanctions levied against non-agricultural products. Specifically, a 100 percent or higher tariff on these motorcycles is proposed. This will cause serious and potentially irreversible harm to American small- and medium-sized business owners selling the vehicles. …Should the availability of product be hindered through unjustified trade sanctions on European-produced motorcycles, dealerships may close.”

Aprilia Tuono 125
Aprilia Tuono 125

According to the AMA, if the agency enacts this motorcycle tariff, serious and potentially irreversible harm will be done to American small- and medium-sized business owners selling the vehicles and to American families who buy these motorcycles for commuting and outdoor recreation.

The same agency tried the same tactic in 2008, but the effort was thwarted when the AMA, the Motorcycle Industry Council and bike manufacturers and retailers rallied motorcyclists against the plan. At that time, the US Trade Representative instead raised the tariff on a variety of European food products.

Piaggio MP3 300 Business
Piaggio MP3 300 Business

ACEM, (Association des Constructeurs Européens de Motocycles), representing the motorcycle industry in Europe, also isn’t happy with the proposal.

Antonio Perlot – ACEM Secretary General

“An inclusion of motorcycles in a list of items subject to higher duties when entering the US would negatively impact manufacturers producing motorcycles up to 500 cc originating from Europe. Such a measure would not only negatively affect the European industry, but also the US consumer, economically and potentially in terms of choice. There is no justification for such measure – the motorcycle sector should not be dragged into trade disputes over food products. ACEM, as the representative of motorcycle manufacturers in Europe, is obviously following this issue closely.”

BMW G 310 R
BMW G 310 R

FEMA (Federation of European Motorcyclists’ Associations) likewise shared concerns about the proposed tariff and will send a written comment to the US Trade Representative this week to protest against these plans.

 Dolf Willigers – FEMA General Secretary

“We strongly oppose these tariffs for several reasons. First out of solidarity with our American fellow riders, who will not be able to buy and ride affordable small and mid-ranged European motorcycles. Secondly this affects European motorcycle manufacturers and suppliers, their workers and the families of the workers. Some smaller manufacturers are largely dependent on the export of their products to the United States and are directly threatened in their existence. People could lose their jobs and families could lose their income.This will also mean that European riders will be limited in their opportunities to choose a light or mid-range motorcycle. What worries me most is that a predictable answer from the European Union will be to have counter measures like reciprocal tariffs on American motorcycles. In 2015 Harley-Davidson alone sold 37,000 motorcycles in Europe. If the European Union decides to put a high tariff on American motorcycles, nobody can afford them anymore. That will have an impact on the lifestyle of many riders. This also will have an enormous impact on the livelihood of many European entrepreneurs and workers and their families. This kind of conflict should be solved by talks and negations, not by starting a trade-war at the cost of motorcyclists and workers in the motorcycle industry.”

Manufacturers impacted by the proposed tariff would be Aprilia, Beta, BMW, Ducati, Fantic, Gas Gas, Husqvarna, KTM, Montesa, Piaggio, Scorpa, Sherco, TM and Vespa.