The origin of the conflict: old tariffs, new consequences
The trade dispute dates back to 2018, when the Trump administration imposed punitive tariffs on European steel and aluminum products. The EU responded with counter-tariffs on various US goods – including motorcycles. Harley-Davidson in particular was targeted: the original import duty of 6 percent was raised by 25 percentage points to 31 percent. An even more drastic increase to 56 percent was only just averted in 2021.
Under President Joe Biden, the punitive measures were temporarily suspended, but with Donald Trump’s return to the White House in 2025, the tariff dispute is picking up speed again. Trump has reintroduced tariffs and the EU has announced a reactivation of the measures, which now even include a 50 percent tariff on motorcycles.
The consequences for Harley-Davidson, Indian & Zero
The situation could be dramatic for US manufacturers. Harley-Davidson, a company that is already struggling with sales problems in Europe, is particularly affected. In 2023, Harley was the only major manufacturer to record a decline in Germany; in 2024, sales fell by 11% and profits by as much as 36%. A further increase in prices due to punitive tariffs could make the European market virtually inaccessible.
An example of price development:
A motorcycle with a base price of €20,000 (approx. $21,600) could rise to €30,000 (approx. $32,400) as a result of the planned tariffs – still without taking VAT or other fees into account. For many interested parties, this would simply no longer be affordable.
Indian Motorcycle, as part of the Polaris Group, is in a slightly better position. Some models are already produced in an assembly factory in Poland and can be sold duty-free. However, large machines such as the Challenger or Roadmaster are still manufactured in the USA and would therefore also be affected.
The electric motorcycle manufacturer Zero Motorcycles, based in California, is also likely to suffer from the tariffs. Although the brand currently only plays a niche role in Europe, the additional costs could make the already difficult market launch for electric motorcycles even more difficult – especially after the bankruptcy of Energica.
Dealers, suppliers and workshops in a quandary
Manufacturers are not the only ones under pressure. European dealers who specialize in US bikes fear a massive slump in sales. Harley dealers in particular, whose business model is heavily geared towards new vehicles, could face a threat to their very existence. Suppliers, workshops and accessory providers are also affected if demand falls. In this environment, insolvencies cannot be ruled out.
Lessons from the past: strategies against tariffs
Back in 2018, Harley-Davidson responded with a two-pronged approach: on the one hand, the Group initially absorbed the additional costs itself in order to keep prices stable – with a strong impact on the profit margin. On the other hand, Harley relocated parts of its production to Thailand to avoid EU tariffs. However, this solution was revoked by the EU in 2021, meaning that the full punitive duty became due again.
Indian Motorcycle responded by expanding production in Europe – specifically in Poland. A strategy that could now benefit the company if further production relocations are possible. However, such investments require time and capital.
Are there ways out of the customs trap?
A diplomatic solution is currently the only short-term hope. The postponement of the entry into force of the punitive tariffs by two weeks to mid-April 2025 shows that negotiations are still ongoing. A rapid relocation of production to Europe is rather unrealistic for Harley-Davidson for cost reasons. Alternative production countries outside the USA could also be classified by the EU as “originating in the USA” for customs purposes, provided that the main components continue to come from the United States.
Threat of counter-tariffs on European motorcycles?
If the conflict escalates further, European manufacturers such as BMW, KTM and Ducati could also come under fire. The USA imports thousands of motorcycles from Europe every year. Punitive tariffs on these brands would be conceivable and could have a considerable negative impact on export figures. Tariffs on European cars are also being discussed – which would further fuel the economic exchange of blows.
Voices from the industry: warning of escalation
Industry associations such as the European motorcycle manufacturers’ association ACEM are calling for motorcycles to be kept out of the trade dispute. Manufacturers who could benefit from a short-term reduction in competition are also critical of the development. The concern: a comprehensive tariff war could also jeopardize access to the important US market.
Dealers in Germany, especially Harley-Davidson contract partners, are alarmed. With tariffs of 50 to 56 percent, the business model of many companies would no longer be viable.
Effects on the market: used prices could rise
If the punitive tariffs come into force as planned, this would not only have an impact on the new vehicle market. Used Harleys and Indians could also become significantly more expensive, as fewer new vehicles will be available and the supply will shrink. For buyers who are already considering a purchase, an early purchase could be worthwhile.
Conclusion: Decision expected by mid-April
Nothing has been decided yet. The EU has deliberately postponed the start date of the punitive tariffs in order to extend the scope for negotiations. Whether an agreement can be reached by mid-April remains to be seen. One thing is certain: if the tariffs are imposed, this could mean the end for many US motorcycles on the European market – with far-reaching consequences for manufacturers, dealers and fans.
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