Trade War II
Surely you’ve heard President-elect Donald Trump say he wants to slap YUGE tariffs on goods imported from China and Mexico. Well, there’s a distinct possibility of such a tariff being imposed on European motorcycles. And it’s much larger than what Mr. Trump proposes.
Since the 1960s, the U.S. has levied a 25% tariff on imported trucks weighing more than 1000 lbs (454 kg). Known as the Chicken Tax (because it was imposed in retaliation for European restrictions on imports of U.S. chicken), it caused Toyota, Nissan and other companies to manufacture light trucks in the U.S., or go through some serious gymnastics to get around (build, dismantle, reassemble once clear of customs).
This time, the dispute is with beef hormones.
And the solution proposed by the Office of the United States Trade Representative is to impose a tariff on European-manufactured motorcycles and scooters with engine displacements between 51 and 500cc. That tariff would be 100%. Or higher. Your $6,699 Vespa GTS becomes a $13,398 item, at the minimum.
The surgical precision of this is striking, but not at all surprising. The effect on the U.S. moto biz will be minor, but only because the U.S. moto biz is such a minuscule part of the economy.
The effect on Vespa and Piaggio in the U.S. would, at most, be an inconvenience.
Vespas sold in the U.S. and Canada are built in Italy. Everything with a Vespa badge in the U.S. is also built in… wait for it… Vietnam. Piaggio Group sells WAY more bikes in Southeast Asia than in the U.S., or even Europe. Their Vietnam factory is newer, bigger and able to produce far more than the one in Pontedera.
There is a belief that Americans wouldn’t accept a Vespa not made in Italy. Well, owners of Fiat 500s seem to think their built-in-Mexico, powered-by-an-engine-built-in-Michigan cars are Italian, even though the company that sells them is incorporated in the Netherlands. So I don’t think Piaggio Americas has anything to worry about.
Still, if this passes the effect on dealers could be devastating.
Luckily, there is something you can do. The American Motorcyclist Association has a handy form with which you can express your displeasure to the USTR.
You have until January 30, 2017 to make a comment. Spread the word, please.