Biden’s EU Trade Dilemma: More Pain for Harley, Distillers or Back off Metals Tariffs?



David Lawder and Rajesh Singh | Reuters

The Biden administration faces a major dilemma in its dispute with the European Union over Trump-era steel and aluminum tariffs: back down to avoid acute pain for Harley-Davidson Inc and whiskey distillers or stick with the duties even though they are now exacerbating acute shortages for U.S. manufacturers.

The EU has threatened to double the tariffs on Harley-Davidson (HOG.N) motorcycles, American-made whiskey and power boats to 50% on June 1, cutting off any residual hope of exports to the continent.

President Joe Biden has pledged that he will maintain the tariff protections for the steel and aluminum industries until the problem of global excess production capacity – largely centered in China – can be addressed.

His sentiments were echoed by U.S. Trade Representative Katherine Tai on Wednesday, and his Commerce secretary, Gina Raimondo, said earlier this month that the tariffs “helped save American jobs in steel and aluminum industries.”

Harley-Davidson has also been hit by a European court ruling that its bikes produced in Thailand will be treated as U.S. made, subjecting them to the 50% tariff as well – on top of the normal 6% tariff.

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