Harley-Davidson is confronting significant financial challenges as escalating trade disputes between the United States and the European Union threaten to impose steep tariffs on its motorcycles. The company’s Chief Financial Officer, Jonathan Root, testified before the House Ways and Means Committee, highlighting the potential impact of a proposed 56% tariff on American-made motorcycles sold in Europe. This tariff would include a 50% retaliatory duty in response to U.S. steel and aluminum tariffs, in addition to the existing 6% import duty.
Root emphasized that such tariffs would drastically increase the cost of Harley-Davidson motorcycles in Europe. For instance, the Road Glide model, which retails for approximately $28,000 in the U.S., could see its price surge to around $124,000 in Denmark due to the combined effect of tariffs, value-added tax, and luxury taxes.
The company has previously absorbed significant costs to mitigate the impact of tariffs. Between 2018 and 2021, Harley-Davidson faced an additional 25% EU tariff, resulting in an estimated $166 million in costs as the company sought to avoid passing these expenses onto European customers.
In addition to challenges in Europe, Harley-Davidson is grappling with high tariffs and taxes in other international markets. Countries like Canada have imposed a 25% retaliatory tariff on American-made motorcycles, while nations such as Thailand, Indonesia, Vietnam, India, and China levy substantial import duties, excise taxes, and value-added taxes on U.S. motorcycles. These measures have created significant barriers to entry for Harley-Davidson in these markets.
Root called for equitable trade practices, stating that Harley-Davidson is being “discriminated against and politically targeted” by the EU and Canada. He urged U.S. lawmakers to pursue fair trade agreements that would prevent foreign competitors from benefiting from low-cost manufacturing and preferential import duties when accessing the U.S. market.
The company has also faced challenges adapting to environmental regulations in Europe. Harley-Davidson discontinued its Sportster model, which did not meet modern air-quality standards, leading to a reduced presence in the European budget motorcycle segment. The replacement model, the Nightster, has yet to achieve similar popularity.
