Trade tensions are heating up with the European Union regarding the ongoing dispute between aircraft manufacturer subsidies, and the Trump Administration has responded with $11 billion in retaliatory EU tariffs which includes 100% duties on motorcycles parts and accessories. What could these EU motorcycle tariffs mean for the industry?
Here we go again.
Trade wars are heating up, and once again, motorcycles are caught in the crosshairs. This time it’s trade tensions with the European Union, and the United States’ response to the ongoing dispute between aircraft manufacturer subsidies, with EU’s Airbus in one corner, and American rival Boeing in the other—a 14-year-old quarrel that the World Trade Organization is struggling to litigate. The Trump Administration has decided “the time has come for action,” and has laid down a proposed $11 billion in EU tariffs. The U.S. Trade Representative (USTR) revealed a list of products on April 8 that would be hit by retaliatory duties, which includes mostly cheeses, wine, airplane parts, and also motorcycles 500-700cc, as well as “parts and accessories for motorcycles (including mopeds).” (HTS subheadings 8711.40.30 and 8714.10.00)
The proposed 100% tariff could have significant consequences for European-based motorcycle manufacturers, including KTM AG. The Austrian-based manufacturer, home to KTM and Husqvarna Motorcycles, currently produces nine motorcycles that would fall into the affected category, with multiple models based on the 510cc and 690cc platforms. Representatives from KTM are currently working with members in DC to get the motorcycles and motorcycle accessories off the list.
While not a lot of European motorcycles fall into the oddly targeted range of 500-700cc, the parts and accessories line item of the EU motorcycle tariffs could have much more far-reaching consequences for European motorcycle manufacturers including Ducati, BMW, Triumph and Vespa.
The EU motorcycle tariff issue already has the attention of the Motorcycle Industry Association (MCIA) in the UK. In an April 12 statement, the MCIA announced it is working with the British government to address the issue: “The U.S. Government have announced that they will likely introduce a 100% tariff on a number of imports from the EU, which will have a direct impact on several product groups from our industry. Please be aware that we are working closely with the UK Government and had already scheduled a meeting with the Minister for early May.”
As of now, the product list is “preliminary” and is open to public comment. The U.S. International Trade Commission will have a hearing in DC on May 15 before finalizing the list, which the U.S. aims to total $11 billion per year, directly countering the exact amount of damage it claims comes from the EU aircraft subsidies.
“This case has been in litigation for 14 years, and the time has come for action,” said U.S. Trade Representative Robert Lighthizer in the USTR April 8 announcement. “Our ultimate goal is to reach an agreement with the EU to end all WTO-inconsistent subsidies to large civil aircraft. When the EU ends these harmful subsidies, the additional U.S. duties imposed in response can be lifted.”
More on this EU motorcycle tariff story as it develops.