In April 2021, the European Union administration demanded that the Belgian Ministry of Economic Affairs revoke the special BOI status it had issued for Harley Davidson.
The essence of the special status Binding Origin Information (BOI) is that it allows the sale of goods “mixed origin”, that is, assembled from spare parts produced in different countries, provided that these spare parts are of equivalent quality regardless of the country of origin. Harley used this loophole to bypass the European customs duty of 31% on motorcycles with a working volume of more than 500cc made in the United States – they simply declared them not as American, but as made in Asia. Now the duty will be imposed based on the country in which the parent company is located.
Continuation of the trade war between the United States and the European Union
To strike a blow more painfully (remember that this whole story takes place within the framework of the trade war between the States and the European Union), the EU authorities decided to increase the duty to 56% (Continuation of the showdown in Europe with Harley Davidson and an increase in duties), as a result of which HD products for Europe with June 1 was supposed to rise in price by 50%. The story escalated even more when a coalition of European and American companies and associations sided with Harley and demanded a tariff freeze and a return to friendly trade relations between the parties.
Now, literally on the eve of the entry into force of the new duties, the European Union and the United States have published a joint statement in which they report on “the beginning of the discussion on solving the problem of the global overproduction of steel and aluminum”… European Commission Executive Vice President Valdis Dombrovskis, US Trade Representative Catherine Tai and US Commerce Secretary Gina M. Raimondo will hold trade talks, shifting the deadline for a potential 56 percent tariff hike to the end of 2021.
We are encouraged by today’s announcement that duties on our products will not be raised from 31 percent to 56 percent, ”said Harley Davidson Chief Executive Officer Jochen Zeitz. -This is the first step in the right direction in an argument that we did not start. Harley Davidson employees, dealers, shareholders and motorcycles must not participate in trade wars.
For Harley, the news is encouraging, but not too much: duties on their products will still be increased by 25% after losing their BOI status. However, the European Association of Motorcycle Designers (ACEM) continues to urge authorities to remove motorcycles from the list of products that are affected by negotiations (and duties) on steel and aluminum.
These duties give other motorcycle manufacturers an unfair competitive advantage in the European Union. European motorcycle manufacturers pay a maximum of 2.4% duty when importing their products to the United States, Zeitz added. – All we want is free and fair trade.