The Brief – Easy Rider under attack

The Brief is EURACTIV's evening newsletter

The iconic Harley-Davidson is the most American of institutions. Incidentally, it is also one of the first targets in a transatlantic trade war.

Dennis Hopper’s favourite ride has again found itself thrust into the heat of Donald Trump’s trade battle with Europe.

And this isn’t the first time. In 2003, the EU threatened levies on its bikes after George W Bush considered hiking taxes on imported steel. Unlike Bush, Trump did not back down with his “America First” import tariffs on steel and aluminium.

Tonight and tomorrow, EU leaders will decide whether to hit Harley, Kentucky bourbon and Levi’s jeans (levy the Levi’s?).

Along with the usual platitudes from business groups that always hit a reporter’s inbox ahead of an EU summit, the EU’s threatened ‘Harley tax’ has prompted a series of panicked press statements from European motorcycle companies and trade associations.

These fears are understandable. Roughly 30% of all European motorcycle exports go to the US. Ducati and BMW are among the European multi-nationals who could suffer from a tit-for-tat response from Trump.

In a trade war, of course, nothing is ever quite as simple as it appears.

“The EU, as the biggest trade power, should be more responsible and reasonable than our US partners,” a senior EU official told the Brussels press pack in a pre-summit briefing earlier this week.

“This trade dispute could be extremely damaging for both sides. Nobody wins with trade wars,” warned Stefan Pierer, the president of the European Motorcycling Manufacturers Association.

Well, up to a point, Lord Copper.

Tariffs have not hurt Harley in India, where the company has been circumventing hefty 100% Indian import tariffs by simply assembling the bikes there since 2011. Sales have grown by 30% in India in the past two years, where Harley now has a 60% share in a rapidly expanding market.

Most of its market is, unsurprisingly, in the US, where 61% of its bikes were sold last year. But sales of Harleys in the US have slumped since Trump became president – falling by 8.5% in the US last year. The company expects a further 7% decline in US sales this year, prompting its share price to tumble.

Europe is its second largest market, accounting for 16% of sales. And Europeans are continuing to buy the bikes.

Slapping EU tariffs might actually have the effect of encouraging the company to replicate its Indian manoeuvre in Europe. That might upset Ducati, BMW, Kawasaki, Honda et al. But precious few European petrol-heads would complain if they got to buy a cheaper Harley.

The Roundup

China is flexing his muscles – with its New Silk Road seen as an attempt to create a massive, multi-national zone of economic and political influence, including in Central Europe.

Strengthened sanctions are needed to send a message of force against Putin’s cronies following the spy attack in Salisbury, urges Anders Fogh Rasmussen, the former PM of Denmark and NATO Secretary General. During the EU summit, Britain’s PM Theresa May will seek a united condemnation of Russia from EU leaders.

The Kosovan parliament ratified a border agreement with Montenegro that is seen as key to unlocking visa-free travel to the EU for Pristina, despite tear gas attacks

Michael Bloomberg has praised Europe’s pioneering green finance action plan presented earlier this month and called capital markets one of the most powerful tools in the fight against climate change.

Faced with an ageing and declining population – a common problem across Europe – Serbia is offering financial incentives to parents.

Extreme weather events are on the rise, according to a report by Europe’s scientific academies, which called for urgent action to make sure infrastructure and society is ready for future crises. Yes, climate change is real.

A new ranking by sustainability group Transport and Environment (T&E) shows that Greece, Cyprus, Italy, Portugal and Croatia are Europe’s worst performers when it comes to climate action.

The number of coal-fired power plants built worldwide is in decline, but emissions are too high to keep global warming within relatively safe levels.

EU efforts to increase energy efficiency are now entering the sharp end of the legislative process, as trilateral talks ramp up and the industry should become active in energy saving, Nadezda Kokotovic writes.

Digital services that collect users’ data, like Facebook and Gmail, will be pulled under EU consumer protection rules as part of a Commission overhaul due next month – sanctions included – a leaked draft proposal shows.

The Parliament’s Environment Committee has called on member states to tighten their laws against anti-vaccination movements and better inform the citizens about its myths and benefits.

Sunday’s fatal collision between an Uber autonomous car and a pedestrian in Arizona shows that the regulatory environment in the US, as well as in Europe, is not ready for fully autonomous vehicles, writes Antonio Avenoso.

Look out for…

Day 2 of the European Council meeting in Brussels, where 28 minus 1 will discuss Article 50 and review the state of the Brexit negotiations.

Views are the author’s

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