Harley-Davidson punitive tariffs - The EU's reaction

Overview of EU countermeasures against US steel and aluminum tariffs

Official announcement from the EU Commission

On March 12, the United States imposed tariffs of up to 25% on imports of steel and aluminum, as well as certain goods containing steel and aluminum, from the European Union and other trading partners. In response, the Commission is taking a series of countermeasures to protect European companies, jobs, and consumers from the impact of these unjustified trade restrictions.

Background: Measures and countermeasures during President Trump's first term in office

In June 2018, during Trump's first term in office, the US government introduced tariffs on European steel and aluminum exports (Section 232 tariffs), affecting goods worth EUR 6.4 billion* (EUR 8 billion based on 2024 trade flows and values). In January 2020, further tariffs were imposed on EU exports of certain derived steel and aluminum products worth around EUR 40 million*. The EU responded with targeted „countermeasures.“.

In 2018, the EU divided its countermeasures into two groups (Annex I and II), each applying to different categories of goods. Annex I covered US goods worth €2.8 billion, while Annex II was intended for goods worth €3.6 billion. A similar response from the EU followed the next tariffs imposed by the US in 2020.

With regard to the 2018 countermeasures, Annex I entered into force immediately in June 2018. Annex II was not due to enter into force until June 2021. However, before Annex II was implemented as planned, the EU suspended all measures (i.e., both annexes) until March 31, 2025. They will now be reintroduced on April 1, just like the 2020 countermeasures. The suspension was the result of talks with the US, which agreed to suspend its Section 232 tariffs on a specific quota of EU exports. This gave both sides more leeway to work together on a comprehensive agreement that also includes CO₂-Intensity and global overcapacity into account, as a long-term solution.

The new measures taken by the US

The measures introduced by the US on March 12 consist essentially of three parts:

• Reintroduction of Section 232 tariffs from June 2018 on steel and aluminum products. These affect various semi-finished and finished products such as steel pipes, wire, and aluminum foil.
• Increase in tariffs on aluminum from the original 10% to 25%.
• Extension of tariffs to other goods, in particular:
  • Steel and aluminum products, e.g., household goods such as cooking utensils or window frames
  • Products that are only partially made of steel or aluminum, such as machines, fitness equipment, certain electrical appliances, or furniture

In addition, the US Department of Commerce is establishing a system by May 12, 2025, whereby the US will extend the additional tariffs of up to 25% to other derived steel and aluminum products.

The US tariffs will affect EU exports worth a total of €26 billion. This corresponds to approximately 5% of all EU exports of goods to the US. Based on current imports, US importers will then have to pay additional import duties of up to €6 billion.

The EU's response

The Commission has responded quickly and appropriately and is protecting Europe's interests with two countermeasures:

• Reintroduction of the compensatory measures from 2018 and 2020
• Introduction of a new package of measures

Reintroduction of suspended countermeasures

On April 1, 2025, the countermeasures of 2018 and 2020 will automatically come back into force after their suspension expires on March 31. This means that they will be implemented in full for the first time. The tariffs will be levied on goods ranging from boats to bourbon whiskey to motorcycles.

New package of measures

As the new US tariffs are significantly more far-reaching and affect European trade to a much greater extent, on March 12 the Commission initiated the procedure to introduce additional countermeasures against the US. These measures target goods worth EUR 18 billion and will then apply in conjunction with the measures reintroduced in 2018. This is to ensure that the total value affected by the EU measures corresponds to the additional value of trade affected by the new US tariffs.

The first step in this process is a two-week consultation with stakeholders in the EU. The purpose of this consultation is to select the right goods for the new countermeasures so that the EU can respond effectively but proportionately and minimize disruption to businesses and consumers.

This is how the entire process of introducing additional countermeasures works:

• March 12 – Start of stakeholder consultation:
  • The list of possible goods proposed by the Commission will be published on the website of the Directorate-General for Trade.
  • A mix of industrial and agricultural products is proposed:
• Industrial products: including steel and aluminum products, textiles, leather goods, household appliances, tools, plastics, and wood products

• • • Agricultural products: including poultry, beef, certain seafood, nuts, eggs, dairy products, sugar, and vegetables
• Starting March 26:
  • Completion of stakeholder consultation
  • The Commission will compile and review the contributions from the consultation.
  • The Commission finalizes its draft implementing act and submits it to the Member States:
    • The legal basis for this act is the Enforcement Regulation (Regulation (EU) No. 654/2014), as the Commission considers the US measures to be safeguard measures.
    • This process follows the committee procedure, which means that EU member states are asked to approve the proposed measures before they are adopted.
• Mid-April – The procedure is concluded and the legal act introducing the countermeasures enters into force.

* Values are given in 2018 prices.

Text: European Commission / Brussels

[wpmfpdf id=“1358437“ embed=“0“ target=""]

My comment: The EU's 99-page list shows which products may be affected by EU punitive tariffs. I couldn't find Harley-Davidson motorcycles on the list, but it is generally assumed that Harley-Davidson will be affected. The amount of the punitive tariff still seems to be unclear due to conflicting reports.

---