Punitive tariffs and stagnating e-motorcycles: Harley-Davidson remains in crisis

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It seems like déjà vu all over again: Donald Trump is barely in office and he is already threatening the EU with punitive tariffs again, just as he did during his first presidency. The 25 percent tariff increase on steel and aluminum from the EU implemented on 12 March shows that he is serious. The EU Commission, in turn, wants to respond with 25 percent tariffs on products from the USA from April 1, and 50 percent for US motorcycles with a displacement of over 500 cm³. Indian Motorcycle is not affected by the problem, as its parent company Polaris operates a plant in Poland, where the motorcycles are produced within the EU and thus avoid the tariffs. Harley-Davidson, on the other hand, would be hit hard, as the already not exactly cheap US bikes would become significantly more expensive.

Sales figures are falling steadily

The brand's sales figures in Europe have been falling for years. The fact that Harley-Davidson recorded a year-on-year increase of 19.9 percent in Germany in 2024, with 8706 new registrations, was due to the discount battle and one-day registrations at the end of the year, as the Euro 5+ standard was just around the corner. However, in Europe as a whole, around 24,000 units were sold, eleven percent fewer than in the previous year. Tariff increases damage the economy at home and abroad, as manufacturers and buyers suffer in equal measure. The costs of the increased customs duties are passed on from importers to customers via dealers, which experience has shown leads to a reluctance to buy and a slump in sales.

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Harley-Davidson im Krisen-Modus (6 Bilder)

This would come at an unfavorable time for Harley-Davidson, as the company headquarters in Milwaukee is currently desperately trying to turn the tide of the downward trend. Jochen Zeitz, a German of all people, is the CEO of the US brand. In 2024, Harley-Davidson delivered 148,862 motorcycles worldwide, which was 17 percent fewer than in the previous year. The manufacturer's operating income fell by a whopping 47 percent to 417 million dollars. Just for comparison: Harley-Davidson sold 329,776 motorcycles in 2014. The brand itself has forecast to its shareholders that sales will fall by up to five percent in 2025 – This does not even take into account the increased EU tariffs.

Things are getting threatening for dealers in the EU

Trump erroneously claims that his tariffs will strengthen domestic industry and safeguard jobs, although the opposite has been proven to be the case. During the president's first term in office, the EU already meticulously worked out where it could hit the US economy most severely, preferably in US states governed by Republicans. This is why the EU has targeted whiskey, jeans, peanut butter, boats and even motorcycles from the USA. The EU Commission is aware that European Harley-Davidson dealers will suffer as a result, but is prepared to accept this. During the first tariff war with Donald Trump, the tariff on Harley-Davidsons was increased by 25 percent to a total of 31 percent, and there was even a threat of 56 percent. Under President Biden at the end of 2021, the long-standing standard tariff rate of six percent was reintroduced.

"Motorcycles should not become collateral damage"

Even back then, European Harley-Davidson dealers warned that their existence was threatened by the high tariffs, and now they are once again facing the same precarious situation. The Association of European Motorcycle Manufacturers (ACEM) protested strongly against the measures on March 12, as they also fear a loss of sales for European brands in the USA. Its Secretary General, Antonio Perlot, said: "Motorcycles should not become collateral damage in major trade disputes. The motorcycle industry creates high-quality jobs, enables mobility and is an important economic factor. Nobody wins in trade wars, which is why we are calling for a fair solution for both sides." The association is campaigning for motorcycles to be removed from the list of punitive tariffs.

Harleys made in Thailand are considered US goods

With a tariff increase of 50 percent, the best-selling Harley-Davidson in Germany last year, the Street Bob, for example, would cost 25,302 euros instead of 17,500 euros list price, while the popular Fat Boy would jump from 26,770 euros to 38,705 euros. Although the manufacturer could cushion the price increase somewhat by not passing on the additional costs caused by the customs duties in full, a proportion would definitely end up with the buyer as a price increase. All Harley-Davidsons for the European market now come from a plant in Thailand, which was put into operation there in 2018. This is why Harley-Davidson sued the European Court of Justice during the first customs war, claiming that its EU motorcycles no longer came from the USA, but lost in the last instance. The court found that the US brand's plant in Thailand was mainly used to circumvent customs duties. The EU punitive tariffs not only affect Harley-Davidson dealers, but also European suppliers. For example, the Italian company Brembo supplies brake systems to Harley-Davidson, while Bosch provides the ABS. If Harley-Davidson sells fewer motorcycles, this also means a loss of sales for the suppliers based in the EU.

LiveWire e-motorcycles obviously not a way out

The business with its electric motorcycles, marketed by Harley-Davidson's "LiveWire" brand, will not lead the company out of the crisis either; on the contrary, it is likely to put even more pressure on it. The development of the electric models has already swallowed up huge sums of money, with LiveWire selling a total of 612  electric motorcycles last year – worldwide.

Turnover fell by 31 percent compared to the previous year. The tariff war would make the situation even worse, as the EU also wants to impose higher tariffs on electric motorcycles and motorcycles with combustion engines under 500 cm³ displacement , the exact amount of which is not yet known.

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