Not an early April Fool's joke!
WASHINGTON, April 1— In an unusually strong protectionist action, President Reagan today ordered a tenfold increase in tariffs for imported heavyweight motorycles.
The impact of Mr. Reagan's action, which followed the unanimous recommendation of his trade advisers, is effectively limited to Japanese manufacturers, which dominate every sector of the American motorycycle market.
The action was exceptional for protecting a single American company, the Harley-Davidson Motor Company of Milwaukee, the sole surviving American maker of motorcycles.
The only comparable trade action by this Administration, the President's decision last May to impose quotas on sugar imports for the first time since 1974, was aimed at an entire industry.
''We're delighted,'' said Vaughn L. Beals, Harley-Davidson's chairman. ''It will give us time that we might otherwise not have had to make manufacturing improvements and bring out new products.''
But it brought angry reaction today from Japanese officials and a threat to file unfair-trade charges against the United States in Geneva.
''We consider it unfortunate that the American side decided to take this kind of drastic measure,'' said Hiroshi Ota, counselor for public affairs at the Japanese Embassy here. He added that Japan was considering taking a formal protest of the action to the General Agreement on Tariffs and Trade.
The action, which becomes effective in 15 days, affects large highway motorcycles with an engine displacement of more than 700 cubic inches,the only market in which Harley-Davidson now manufactures. It would raise the current tariff of 4.4 percent to 49.4 percent in the first year of the five-year program.
Tariffs for machines in the largest single market for motorcycles in this country, recreational machines under 400 cubic centimeters displacment, would not be affected by the action.
Total United States imports of heavyweight motorcycles were around 200,000 units in 1982, of which 80 percent were Japanese. Overall motorcycle imports run well over a million units a year.
Market analysts said that because of heavy backlogs of unsold motorcycles and extensive discounting, it was unlikely that prices would rise much in the current selling season as a result of the increased tariffs.
The International Trade Commission's specialists predicted that prices would rise about 10 percent in the first year of the five-year period for tariff relief the President ordered today -and another 12.5 percent in the second year. 'Escape Clause' Used
The President's order, which was signed in Santa Barbara, Calif., was taken under the so-called Escape Clause of the trade law authorizing help for industries severely hurt by import penetration.
It hewed closely to a recommendation by the United States International Trade Commission, which found last January that Harley-Davidson had been badly hurt by imports from four Japanese companies - Honda, Kawasaki, Suzuki and Yamaha.
Harley-Davidson, which had dominated the industry in the earlier postwar period, now makes only larger, more expensive motorcycles (over 1,000 cubic centimeters displacement).
But in earlier testimony to the I.T.C., the company said it hopes to reenter the market for machines of 750 cubic centimeters and thus needs protection there.
In a message to Congress appended to today's order, the President said the relief was ''consistent with our national economic interests.'' He added: ''I have maintained that I would enforce our trade laws where necessary and where such actions are consistent with our international obligations.''
The domestic auto industry had failed in 1980 to get relief under the same Escape Clause provision of the trade law used today, although the Administration did prevail on the Japanese to accept voluntary limitations on car shipments to the United States. Declining Tariffs Set
Under the plan, tariffs will rise by 45 percentage points, to 49.4 percent, in the first year. But the rate will be scaled back to 39.4 percent in the second year; to 24.4 percent in the third year; to 19.4 percent in the fourth year, and to 14.4 percent in the fifth year, according to the order. After the fifth year the tariff returns to 4.4 percent.
The order, however, permits 5,000 motorcycles to come in without duty increases from West Germany, and provides for increases to 6,000, 7,000, 8,500 and 10,000 in the four subsequent years.
Also, it exempts from the higher duties Triumph bikes from Britain and Ducati bikes from Italy; up to 4,000 units from these countries are permitted to come in at the old rate (increasing by 1,000 units yearly for five years).
In addition, Japan would be permitted to bring in 6,000 units (increasing by 1,000 units annually) at the old duty. As a result of today's action, some Japanese trade specialists reported, Suzuki and Yamaha may now be induced to build plants here. Honda and Kawasaki together produce more than 50,000 units a year in the United States.
http://www.nytimes.com/1983/04/02/business/us-raises-tariff-for-motorcycles.html
Just a piece of history.
WASHINGTON, April 1— In an unusually strong protectionist action, President Reagan today ordered a tenfold increase in tariffs for imported heavyweight motorycles.
The impact of Mr. Reagan's action, which followed the unanimous recommendation of his trade advisers, is effectively limited to Japanese manufacturers, which dominate every sector of the American motorycycle market.
The action was exceptional for protecting a single American company, the Harley-Davidson Motor Company of Milwaukee, the sole surviving American maker of motorcycles.
The only comparable trade action by this Administration, the President's decision last May to impose quotas on sugar imports for the first time since 1974, was aimed at an entire industry.
''We're delighted,'' said Vaughn L. Beals, Harley-Davidson's chairman. ''It will give us time that we might otherwise not have had to make manufacturing improvements and bring out new products.''
But it brought angry reaction today from Japanese officials and a threat to file unfair-trade charges against the United States in Geneva.
''We consider it unfortunate that the American side decided to take this kind of drastic measure,'' said Hiroshi Ota, counselor for public affairs at the Japanese Embassy here. He added that Japan was considering taking a formal protest of the action to the General Agreement on Tariffs and Trade.
The action, which becomes effective in 15 days, affects large highway motorcycles with an engine displacement of more than 700 cubic inches,the only market in which Harley-Davidson now manufactures. It would raise the current tariff of 4.4 percent to 49.4 percent in the first year of the five-year program.
Tariffs for machines in the largest single market for motorcycles in this country, recreational machines under 400 cubic centimeters displacment, would not be affected by the action.
Total United States imports of heavyweight motorcycles were around 200,000 units in 1982, of which 80 percent were Japanese. Overall motorcycle imports run well over a million units a year.
Market analysts said that because of heavy backlogs of unsold motorcycles and extensive discounting, it was unlikely that prices would rise much in the current selling season as a result of the increased tariffs.
The International Trade Commission's specialists predicted that prices would rise about 10 percent in the first year of the five-year period for tariff relief the President ordered today -and another 12.5 percent in the second year. 'Escape Clause' Used
The President's order, which was signed in Santa Barbara, Calif., was taken under the so-called Escape Clause of the trade law authorizing help for industries severely hurt by import penetration.
It hewed closely to a recommendation by the United States International Trade Commission, which found last January that Harley-Davidson had been badly hurt by imports from four Japanese companies - Honda, Kawasaki, Suzuki and Yamaha.
Harley-Davidson, which had dominated the industry in the earlier postwar period, now makes only larger, more expensive motorcycles (over 1,000 cubic centimeters displacement).
But in earlier testimony to the I.T.C., the company said it hopes to reenter the market for machines of 750 cubic centimeters and thus needs protection there.
In a message to Congress appended to today's order, the President said the relief was ''consistent with our national economic interests.'' He added: ''I have maintained that I would enforce our trade laws where necessary and where such actions are consistent with our international obligations.''
The domestic auto industry had failed in 1980 to get relief under the same Escape Clause provision of the trade law used today, although the Administration did prevail on the Japanese to accept voluntary limitations on car shipments to the United States. Declining Tariffs Set
Under the plan, tariffs will rise by 45 percentage points, to 49.4 percent, in the first year. But the rate will be scaled back to 39.4 percent in the second year; to 24.4 percent in the third year; to 19.4 percent in the fourth year, and to 14.4 percent in the fifth year, according to the order. After the fifth year the tariff returns to 4.4 percent.
The order, however, permits 5,000 motorcycles to come in without duty increases from West Germany, and provides for increases to 6,000, 7,000, 8,500 and 10,000 in the four subsequent years.
Also, it exempts from the higher duties Triumph bikes from Britain and Ducati bikes from Italy; up to 4,000 units from these countries are permitted to come in at the old rate (increasing by 1,000 units yearly for five years).
In addition, Japan would be permitted to bring in 6,000 units (increasing by 1,000 units annually) at the old duty. As a result of today's action, some Japanese trade specialists reported, Suzuki and Yamaha may now be induced to build plants here. Honda and Kawasaki together produce more than 50,000 units a year in the United States.
http://www.nytimes.com/1983/04/02/business/us-raises-tariff-for-motorcycles.html
Just a piece of history.
