Amidst the ongoing trade negotiations with the Chinese government and tariff impositions on Chinese imports, the Trump administration appears to be gearing up to target the European Union trade bloc with the same tactics of negotiation.
Harley Davidson has found themselves in the middle of this fight. As an iconic American manufacturer, the symbolism of their brand carries a heavier weight, and their current woes have been publicly blamed on the trade spats going on globally.
When President Trump imposed the “section 232” duties on steel and aluminum in early 2018, the EU responded with tariffs of their own, focused on visible American exports like motorcycles and bourbon. This led to Harley Davidson declining in sales and moving some manufacturing to Thailand to avoid the tariffs, a move heavily criticized by the President at the time, Now, coming off a bad quarter for Harley Davidson, the President has threatened additional tariffs on European products if the ones imposed on motorcycles and other products are not dropped as he believes they are damaging American businesses.
This comes hot on the heels of a simmering dispute going on at the WTO involving subsidies to Boeing and Airbus. As I detailed in a newsletter earlier this month, both the EU and USA have been found to be giving unfair subsidies to their respective airplane manufacturer. This dispute is pending rulings from the WTO soon, and may result in considerable imposition of new tariffs by both sides, maybe even escalating into a trade war.
Currently we have not been told what the potential duties would be involved in new tariffs, but it seems likely they will be similar in function to the tariffs imposed on Chinese imports last year. Until they are imposed and guidance is given from Customs, we can’t know for sure. If you’d like to discuss how these might affect your company in the future, please contact our VP of Sales Andrew Galloway at agalloway@jmrodgers.com or 973-726-5340.
