The EU confirmed Tuesday it was slapping a 56-percent tariff on imported Harley-Davidson motorcycles as part of a trade war former US leader Donald Trump started in 2018.
The American motorbike maker has said it will immediately mount a legal challenge to the measure, which is to take effect from June 1.
After the EU imposed retaliatory levies on emblematic US goods in reaction to Trump’s decision to hike import duties on steel and aluminium products manufactured in Europe, Harley-Davidson thought it had found a way to escape the higher levies by shifting some of its motorbike production to Thailand.
This allowed it to import its motorbikes made outside of the US into Europe via Belgium at a much-lower six-percent tariff.
But the European Commission says that will not fly.
A Belgian authorisation for Harley-Davidson motorbikes coming from Thailand fell foul of “Binding Origin Information” rules that set out in technical detail how a product’s country of origin is worked out.
“This (Belgian) decision was examined by the European Commission, and it proved that the decision was incorrect. We have therefore requested Belgium to revoke this incorrect decision,” a commission spokesman, Daniel Ferrie, told journalists.
“The reason why it was proven to be incorrect was that there was a change in location of production of the motorbikes in question,” he said, adding that the revocation would not be applied retroactively.
Harley-Davidson, as it announced better-than-expected first-quarter results this week, said the impending higher tariffs “will effectively prohibit the company from functioning competitively in Europe”.
Harley-Davidson’s use of Thailand to build some of its motorbikes provoked the ire of Trump, whose protectionist campaign was aimed at boosting American-made goods made in America.
The arrival of Joe Biden in the White House has raised prospects of the Trump-era trade war being resolved through negotiations.
Optimism for that has been fuelled by both sides of the Atlantic taking steps last month to put a long-running tit-for-tat conflict over Airbus and Boeing on pause.