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Running on Fumes

Get Your Tariff On

Friday, December 12, 2008
Tariffs have been a part of American politics since the beginning. After rebellion from Great Britain, a tariff on imports provided revenue for a fledgling nation that was in deep dept. In the intervening years, tariffs also provided protection to American industry, before US manufacturing became the juggernaut it is today (or used to be).

Now we live in an era of free trade agreements and low-tariff trade treaties, but tariffs still pull weight during trade disagreements. Right now America is upset that Europe won’t import growth-hormone beef, so the US wants to impose a 100% tariff on imported European motorcycles under 500cc.

The good news is punitive tariffs and trade hostilities are leveraged on the negotiation tables - not by invading armies storming the beaches. So, for example, America will hopefully never have a shooting war with nuclear-armed China, but there may be some nasty trade disputes in the future.

The bad news is innocent parties suffer, like anyone in the US involved in the sub-500cc European motorcycle market. As pointed out by the AMA and Piaggio Group in recent press releases, the proposed 100% tariff will cost American jobs. 
AMA Warns Tariff Will Cost US Jobs
Piaggio Comments on Proposed Tariff

Perhaps the threatened tariff is just saber-rattling that will get Europe to drop its 20-year-old ban on growth-hormone beef. Either way, there will be winners and losers in the trade war.
Post Tags: motorcycle tariff, US Euro motorcycle dispute
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Comments
WilCon -Tariff December 17, 2008 12:48 PM
What is the size of the European sub 500cc market? Everyone talks about lost jobs, but who actually operates in this market? Japanese makers will still have the same tariff arrangement as currently in place. I agree with the AMA on one major point, what do motorcycles have to do with a beef about beef? (pun intended)