Iconic Motorcycle Brand Faces Major Price Hike in Europe
Harley-Davidson, one of America’s most recognizable motorcycle brands, is caught in the crossfire of an escalating trade dispute between the United States and the European Union (EU). With the EU poised to impose a 50% tariff on Harley-Davidson motorcycles, the Milwaukee-based company is now calling on the U.S. government to implement reciprocal tariffs on foreign competitors to level the playing field. The proposed EU tariffs, expected to take effect in April, could make Harley-Davidson motorcycles significantly more expensive in Europe, further straining the company’s already declining sales in the region.
The dispute stems from a broader trade war between the U.S. and the EU, with each side retaliating against tariffs imposed on various industries. Harley-Davidson has long been a focal point in these tensions, as its motorcycles are among the most well-known American exports. The company now argues that allowing foreign competitors to sell motorcycles in the U.S. with lower tariffs while its own products face steep European import duties creates an unfair advantage.
Harley-Davidson’s Chief Financial Officer, Jonathan Root, addressed a congressional trade panel this week, emphasizing the need for equal trade policies.
“Competitor brands should not be allowed to take advantage of low-cost manufacturing and preferential import duty when accessing the U.S. market,” Root stated.
Harley-Davidson is pushing for reciprocal tariffs on foreign motorcycles as it prepares for the impact of a 50% EU tariff, which could dramatically raise prices in European markets.
The Financial Burden of EU Tariffs on Harley-Davidson Motorcycles
The proposed European tariffs are a direct retaliation against U.S. trade policies dating back to the Trump administration. While tariffs have long been a tool in trade negotiations, the effects on manufacturers like Harley-Davidson can be severe. If the new 50% tariff is imposed, Harley-Davidson bikes could become nearly unaffordable for European consumers, potentially crippling the company’s sales in the region.
Currently, a Harley-Davidson Road Glide, which retails for $28,000 in the U.S., is already priced at around $77,000 in Denmark due to a 25% value-added tax (VAT) and a 150% luxury tax. The introduction of a 50% tariff would push the price to an astonishing $124,000, making it one of the most expensive motorcycles in the European market.
The company argues that such a steep price increase would not only drive away potential customers but also allow European and Asian competitors to dominate the market, as they would still benefit from more favorable trade policies.
If the 50% EU tariff is implemented, Harley-Davidson motorcycles could see prices increase to $124,000 in Europe, making them inaccessible to many riders.
Harley-Davidson’s Complicated History with Tariffs
Harley-Davidson has had a long and complicated relationship with trade tariffs, benefiting from them in certain periods while suffering under them in others. In the 1980s, the Reagan administration imposed duties on imported motorcycles, a move that helped rescue Harley-Davidson from near bankruptcy and allowed it to dominate the U.S. market. However, in 2018, the company became a victim of retaliatory tariffs imposed by the EU, which slapped a 25% duty on Harley-Davidson motorcycles as part of a broader trade dispute over U.S. steel and aluminum tariffs.
The impact of these tariffs forced Harley-Davidson to absorb a $166 million cost over three years to keep retail prices competitive. To offset this burden, the company shifted part of its production to Thailand, a move designed to bypass European tariffs and maintain affordability in overseas markets. However, this decision also sparked criticism from U.S. lawmakers and customers who saw the move as outsourcing American jobs.
Despite these efforts, Harley-Davidson continues to face significant challenges in the European market, where competitors such as BMW, Triumph, and Ducati dominate.
Harley-Davidson has experienced both benefits and setbacks from tariffs, with past protections helping its U.S. growth while recent EU tariffs have hurt its European market.
Harley-Davidson Struggles to Compete in Europe’s Changing Market
Beyond the immediate threat of tariffs, Harley-Davidson is already struggling in Europe, where shifting consumer preferences and rising prices have made competition fiercer than ever. Many riders in Europe are turning to more affordable, fuel-efficient motorcycles, and local brands such as BMW, Ducati, and Triumph continue to dominate the market.
One of Harley-Davidson’s most significant strategic missteps was the discontinuation of its Sportster lineup, which accounted for nearly one-third of its European sales. The Sportster was a relatively affordable option, but its aging engine did not meet modern environmental regulations in Europe. The company introduced the Nightster as a replacement, but it has failed to attract the same level of consumer interest.
Dealers and riders alike have complained that Europe’s strict clean-air standards have muffled the signature growl of Harley-Davidson’s V-Twin engines, which were once a major part of the brand’s identity.
“They were significantly over-engineered and too expensive, so we lost the entry level,” said Christian Arnezeder, a former Harley-Davidson executive in Central Europe.
Motorcycle industry consultant Michael Uhlarik echoed this sentiment, stating that the combination of rising prices and a lack of appealing entry-level models could be catastrophic for Harley’s presence in Europe.
“Even a 10% to 20% increase in pricing, plus antipathy toward American brands in general, would be a death knell,” Uhlarik warned.
Harley-Davidson’s European market share is shrinking, as rising prices and a lack of entry-level models have made it difficult to compete with local brands like Ducati and BMW.
Future of Harley-Davidson in the Global Market
As Harley-Davidson continues to navigate the complex world of global trade and tariffs, the company’s success will depend on its ability to adapt. While it is seeking government intervention to impose reciprocal tariffs, it must also find ways to revitalize its product lineup to appeal to both European and American consumers.
With electric motorcycles, cleaner engines, and strategic partnerships, Harley-Davidson could still carve out a path for success despite the mounting challenges in the global motorcycle market.
