Memorandum on Heavyweight Motorcycle Imports

April 1, 1983

Memorandum for the United States Trade Representative

Subject: Motorcycle Import Relief Determination

Pursuant to Section 202(b)(1) of the Trade Act of 1974 (P.L. 93 - 618, 88 Stat. 1978), I have determined the action I will take with respect to the report of the United States International Trade Commission (USITC), transmitted to me on February 1, 1983, concerning the results of its investigation of a petition for import relief filed by the Harley-Davidson Motor Co., Inc., and Harley-Davidson York, Inc., producers of heavyweight motorcycles, provided for in item 692.50 of the Tariff Schedules of the United States (TSUS).

After considering all relevant aspects of the case, including those set forth in Section 202(c) of the Trade Act of 1974, I have determined that granting import relief is consistent with our national economic interest. Therefore, I will proclaim the USITC five-year import relief remedy with one modification. I will impose tariff increases of 45 percent ad valorem in the first year, declining to 35, 20, 15 and 10 percent above scheduled rates in subsequent years. Imposition of these tariff increases should allow the heavyweight motorcycle industry to adjust to the threat of injury caused by increased imports, which have raised inventories to twice their normal level.

To assure small volume producers who have not contributed to that threat of injury continued access to U.S. markets for heavyweight motorcycles, I will modify the USITC remedy by proclaiming tariff-rate quotas of 5,000 units (increasing yearly to 6,000, 7,000, 8,500 and 10,000) for imports of motorcycles manufactured in the Federal Republic of Germany, and 4,000 units (increasing yearly by 1,000) for imports from all other countries except Japan. The additional duties will apply to all imports above the tariff-rate quotas. In order to treat Japan fairly I will also proclaim a tariff-rate quota of 6,000 units (increasing 1,000 yearly) for motorcycles imported from Japan.

I also direct you to keep the issue under close review so that, should the U.S. motorcycle industry no longer need this level of relief, you may, in consultation with the Trade Policy Committee, obtain other necessary advice and propose changes in the terms of relief. If no earlier review is initiated by such conditions, you are to undertake such a review in two years. The objectives of this review would be to assess the effectiveness of import relief and Harley-Davidson's trade adjustment efforts.

Ronald Reagan