The European Union has suspended a dramatic increase in punitive tariffs on Harley-Davidson motorcycles, as a gesture of conciliation with the US government. This decision, announced on 17 May, prompted a spectacular 9% jump for Harley’s share price on the New York Stock Exchange.
The EU had stuck an additional 25% tariff on Harley machines imported into Europe, after former US President Trump imposed heavy tariffs on European steel and aluminium exports to the US thre years ago, taking total duties levied to 31%. And because there has been no resolution of the original US imposition, it recently announced that the retaliatory tariff would double to 50% on 1 June.
But the European Commission now says the tariff will remain at 25% for up to six months while trade negotiations take place. However, it had also recently revoked a “rules of origin” agreement whereby Harley-Davidson bikes assembled in Thailand and then shipped to Europe were exempt from the retaliatory tariff, and only subject to a 6% charge. These machines will continue to treated as US-made and liable for the full 31% tariff rate.