Harley-Davidson could be the biggest loser from the trade war that’s set to be sparked by Donald Trump’s planned import duties on steel and aluminium (or is that aluminum?)
The President appears determined to push through the planned tariffs, which will put a 25 per cent tax on imported steel and a ten per cent duty on aluminium sourced outside the US. The USA’s trading partners are planning their retaliation, and Harley-Davidson has been specifically pinpointed as an American icon that could be taxed heavily.
Europe has already drawn up a list of American-made products that it could hit with taxes if – or perhaps when – the US steel and aluminium tariffs come into play. Among them are Levi’s jeans, Jack Daniel's bourbon and Harley-Davidsons.
For the bike firm, it would be a double-whammy. Around 16 per cent of its production goes to Europe at the moment and sales would be slashed there if a levy – potentially as high as 25 per cent - was added to the bikes’ prices. And on top of that, as a manufacturer that uses a lot of steel and aluminium, its production costs would inevitably be increased either through having to pay Trump’s tariffs on imported metal or by buying pricier American-sourced steel and aluminium.
That means that even the 60 per cent of Harleys that are currently sold in the USA could end up costing more than they do today.
As for the remaining 40 per cent, Europe may not be the only country that penalises American products should the tariffs come into force. As one of the most famous brands to come from the States, Harley could also find itself hit by extra taxes in other countries as well.
Whether other American bikes – Indian, for example – are also targeted, remains to be seen. Of course, in the tit-for-tat battle that appears to be on the verge of commencing, other imports and exports could also be hit as trading blocs slap others’ products with tariffs. Trump is already mooting the idea of putting extra taxes on European cars sold in America, so it’s quite possible that other bike makers could end up tangled up in the fallout. Yay.
• MEANWHILE, the UK MCIA has made a strong representation to the government on this, telling it that any EU/US trade war will also be a disaster for the UK bike industry. "Should the situation escalate," a spokesperson said, "there is a strong possibility that the European and UK market will suffer significant damage at a time when Brexit brings enough uncertainty and challenge to the economy."