The Tariff, '85

The twenty somethings won't know anything about this, but, They're probably wondering why the size of motors changed in 1985. Like why were there, all of a sudden, 700's instead of 750's? Why were there 500's instead of 550's and why 1000's instead of 1100's.

Well, this is the way I remember it. . . .

The 70's come around and the silicone chip makes its way into motor vehicles. Making them easier to maintain, perform better, etc. The Japanese take full advantage of this and start pumping out motorcycles like nobodies business. Especially the inline 4's, but not just the 4's, the V twins, inline twins, and GY6 scooters (Honda Elite, Yamaha scoots), etc. By the 80's, everyone and their grandmother owned something Japanese and two wheeled. They were so dominant that Piaggio stopped selling Vespas in the US in 1983. That stoppage lasted 20 years.

American and European bike companies couldn't sell a bike in the US to save their lives, so, they got together, lobbied and petitioned the US to put tariffs on Japanese motorcycles. Citing they were too fast, and too dangerous. The US succumbed and granted the tariffs. They put limits on how many bikes they could sell in a year of the most popular sized motorcycles, 550's, 750's, and 1100's.

So, did the Japanese give in to the limits and just sell less motorcycles?
NO!!! The tariff put a limit on bikes over 500cc, 700cc, and 1000cc
What did the Japanese do? That year they made a lot of 498cc, 698cc, and 998cc motorbikes. Hence the 1985 XJ700 (696cc), '84-'85 Honda VF 700 Sabre, Suzuki GS700E, and then the whole Knighthawk thing where they advertised the 650cc bike to have the power of an older 750cc. Then pumped it up to a 700, Brilliant!

Anything to add or corrections to my post are welcome.

Just a little history. I sound like an old fart.
"This land use to be peach orchards! As far as the eye could see!!"
"mmmmmmmmmmmmmmmmmmmmm"

 

Sort of. What I remember happening is that there was a glut of Japanese motorcycles in the US market, which led to deep discounts in an effort to move product (a byproduct of the ever-increasing number of new models each year; many of which were competing against models from their own product line). Harley Davidson (struggling to overcome the stigma gained during the horrible AMF years) couldn't compete on price, and lobbied congress to raise tariffs on all imports over 700CC. To their credit H-D also called for the tarrifs to be dropped a year later once it had become clear that the Japanese manufacturers weren't intentionally dumping product in the U.S., and that H-D was alive again.

When you find yourself lusting after a bike that isn't brought to the U.S. you can thank the fustercluck that was the big three's U.S. marketing scheme during the '80's. It was not at all uncommon to see a brand new '82 or '83 model year bike still in dealer inventory as late as 1990.

 

Yeah, to HD's credit they requested the tariff expire two years in rather than exploit it. This change from AMF ownership to employee buy-in brought about the Evolution (all aluminum) series of engines and made the juggernaught they are today.

As to not getting cool bikes here when they are released in Europe, I thought that was more a matter of restrictive licensing in Europe and Britain which forced manufacturers to properly engineer smaller displacement bikes in an effort to make them more desirable to riders who could legally only get a 125cc, 250cc, 400cc, or in some nations horsepower restricted bikes. I know there are also still some existing tariffs on machines built in Europe which make some machines economically infeasible to import to the US, I am thinking of the Honda 599 Hornet which was an awesome bike but priced itself out of the market because it was a euro-built bike and had to carry the import taxes in its MSRP.

 

That's closer to what happened. The Harley-inspired tariff was on anything 750 and above, hence all the 700s.

There wasn't any limit on 550s and the reason the liter bikes changed was because they are sold all over the world and Germany had instituted some displacement restrictions.

 

The tariff actually was started in April of 1983, not 1985 as the forum title indicates:This obviously affected many different bikes, but I'm pretty familiar with what happened as it directly impacted the xj900rk here in the USA.......that's why only about 1000 were brought here. Production of THEM started in March 1983 and the tariff started (and 900rk stopped coming in) by the middle of April 1983.

--------------

Here's a NYTimes article form the newspaper dated April 2, 1983---

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.

------------------

Hope that gives some more clarification.

Dave Fox

 

And yet another version of the same story:

AND THEN SUDDENLY, THE MUSIC STOPPED:

However, not all things were quite as meets the eye, and it is an ironic twist of fate that what actually led to the development and introduction of the XJ-series of bikes also led to their demise.

The 1980's were actually a very difficult decade for the company.

In the late 70's/early 80's Yamaha made a conscious marketing and strategic business decision to try and overtake Honda as the largest builder of motorcycles, and that's what actually led to the amazing proliferation in both the number of models and production quantities.

Kawasaki and Suzuki quickly followed the herd, and soon the world (especially North America, the biggest market) was awash in un-sold motorcycles, and the standard price wars that always follows over-production quickly started.

It has been noted that by the early 1980's that Yamaha alone had over 1 million unsold bikes in their dealer and factory inventory, and to try and move them out, huge price discounts started appearing......and that started eating into Harley-Davidson sales and profits.

This is when H-D went to the US Government and got an import tariff and restriction on 700+cc sized bikes. Which wasn't really necessary, since Yamaha had given up on their grand plan by then, and they and others simply slowly bled off the excess inventory via the discontinuance of most models (XJ's included) and no new production in most of 1983 and 1984.

In fact, soon after the 1985-86 models hit the showroom, H-D had gone back to the US Government and told them that the import restrictions were no longer needed! (and the restriction and tariff was lifted in 1987). Of course, for the USA, it was too late for those dealers to get the larger XJ750-X models........and by then, the consumer rush to the newer style model "sport" bikes and huge cruisers had started, and that was the end of the XJ-series of street-sport-cruiser style bikes.

So by this era---the mid-to-late 1980's---all manufacturers were styling most of their North American street bikes to fit into one of three basic categories:

Touring: Large, heavy bikes, with storage trunks, fairings, sound systems, and all sorts of comfort and convenience features----two wheeled "rolling couches".

Sport: Light, nimble, jack-be-quick race styled bikes, with lots of body shrouding ("plastic"), usually with high-revving, smaller displacement engines.

Cruisers: Smooth styling, low ride, mellow tuned.


All the major manufacturers produced some really great touring, sport, and cruising bikes; however, many motorcycle enthusiasts really did not see any of them falling into the category of what was really still desired.......and that being a capable, dependable, good-all-around "road bike".

The original XJ Seca and Maxim models seem to be some of the last of these "all around" road bikes that were available in the marketplace; that is, they don't really fit into one of the three basic categories above, but these bikes did have there own particular styling that suggested they were on the edge of both the cruising or sport styled categories. Sadly, models such as the XJ Maxim and the Seca did not continue in production anywhere, as the evolving Seca II type style (sport bike) seemed to become the market preference.



http://www.xjbikes.com/Forums/viewtopic/t=14576.html

 

Here's an informative link from Chacal's History of Yamaha page.

http://www.maxim-x.com/itc_700cc_tariff_details.html

 

It's not really another version.... Rather, is the results ---

The news article came out a couple weeks before the tariff was to be in effect, and Len's article follows up after the tariff was removed and why/how.

Dave

 

fascinating read. thanks guys!

 

i'd like to add to this but the early 80's were kind of a blur. if ya know what i mean

 

Do you mean that you weren't very thirsty back then?

The 70's are foggy for me. The drinking age was 21 in PA and 18 in NY. Guess where we went every weekend.

 

Very interesting read.. I was just talking to my upholstery guy and he told me about this story, but the way he remembered it slightly different and he was around then and riding. He said that in order to just move product the Japanese companies sold 750's with 700 badges and so on. He told me he had an early 80's Honda shadow that said 700 but he rode his brothers 750 shadow and swore they were the exact same. Is there any truth to this? Were people really getting the same bike just with a smaller cc badge?

 

I don't believe that for one second. Physically, they were probably the same outside, but the cyl's and pistons were bigger inside.

 

Ditto. One of the more interesting things to come from the tariff is that nearly all of the 700cc machines produced more power than the 750cc machines they replaced. Reduce displacement, bump compression up a little, and you get a nice Japanese F-U for congress to suck on.

 

No replacement for displacement? Try engineering and technology!

 

Glad the Harley crybabies did get any tarrif crap North of the 49th. AMF put out a crap product and to this day many purist Harley guys won't go near an AMF bike! And yes we saw truck loads of xs400's arriving at the shop on sale at $1499 for the special and special II at $1299 (dealer net $980)and we still made money ! Same price for honda cb400 and cm400. Honda did outsell the yamaha because of seat hight for the vertically challenged !

 

Were the XR-750 Flat trackers from the 70's an AMF bike? Those things are pretty bad-ass!

 

Don't think that was an AMF bike , even they couldn't screw that up

 

AMF had nothing to do with the XR-750. It was already being developed when AMF bought HD in '69, and as a race bike it was treated quite differently from the production-line machines.

 

True , racing was a big thing for harley with the xr750. Even AMF wasn't that stupid.

 

That's what I thought. Now they're trying to re-capture the glory with the new 750. I don't think it is quite up to the original. Also, a lot of aftermarket guys like Roland Sands are making parts that will turn a modern Sportster into an XR750 flat track style bike. It's a pretty cool look, but those high exhaust pipes look a little warm! The example I posted above is in the Barber Museum's collection.

 

Another question from a guy that was barely around at the time: is AMF related to automaker AMC of Javelin fame? Their muscle cars like Javelin and Rambler were so cool, and the Gremlin's style was toooooo much! Could the same company ruin a motorcycle brand after making such excellent cars?

 

The new 750/500 isn't even HD trying to recapture the XR750. It's an entry-level bike that has been in the works for almost a decade.

AMF is not in any way connected to AMC

AMF = American Machine and Foundry, founded in 1900

AMC = American Motors Corporation, formed in 1954 as a merger of Hudson motors and Nash.