Harley-Davidson To Move More Production Oversees Amid US-EU Trade Tensions

Harley-Davidson Is Shifting Production Away From the U.S. As Trump's Trade War Rages OnMore

Harley-Davidson Is Shifting Production Away From the U.S. As Trump's Trade War Rages OnMore

Trump also warned Harley that the company would be heavily taxed if it tried to import goods from its European production centers back to the us, though there is no indication that the vehicles it produces there would be sold anywhere but on the continent. He also vowed to retaliate against Harley-Davidson with taxes and said its "employees and customers are already very angry at them".

Harley-Davidson, which Trump has cited in the past as a company hurt by US trade regulation, said the increased tariffs would cost the company an extra $30 million to $45 million in 2018.

President Donald Trump reacted with surprise on Monday to news that motorcycle maker Harley-Davidson made a decision to move some of its manufacturing overseas in response to hefty European Union tariffs. Moving production overseas, it said Monday, was "the only sustainable option to make its motorcycles accessible to customers in the European Union and maintain a viable business in Europe".

"Harley-Davidson maintains a strong commitment to US -based manufacturing which is valued by riders globally", the company's filing said. These EU tariffs came in retaliation for steep tariffs that the Trump administration has imposed on the EU. In the U.S., Harley-Davidson sold 147,972 motorcycles a year ago, according to company data.

President Donald Trump spent part of Tuesday morning tweeting about Harley-Davidson, specifically calling out the motorcycle giant's plant in Kansas City.

Trump tweeted "Early this year Harley-Davidson said they would move much of their plant operations in Kansas City to Thailand. Hence, they were just using Tariffs/Trade War as an excuse", Trump said on Twitter. Martinez added. "Does Harley even understand what "Made in America" means?"

"We think Harley's decision to protect European Union demand is wise for the long-term health of the market", Baird Equity Research said in a note.

"Therefore, Harley-Davidson will not raise its manufacturer's suggested retail prices or wholesale prices to its dealers to cover the costs of the retaliatory tariffs".

The administration's move to impose the tariffs came after a nine-month investigation, led by Commerce Secretary Wilbur Ross, which found the current level of aluminum and steel imports to the USA had the "potential to threaten our national security". At a rally in Janesville in 2016, Trump said: "He doesn't look like a motorcycle guy to me".

These European Union tariffs against specific USA products was meant as retaliation for Trump's imposition of tariffs against steel and aluminum imports from the European Union. In the first quarter of 2018, Harley-Davidson cited Europe as an area where it experienced "strong results". The EU sales make up nearly 16.4 percent of Harley-Davidson's worldwide sales.

Harley forecast the EU's retaliatory tariffs would cost the company $US90 million ($121 million) to $US100 million ($135 million) a year.

Mr Trump said he has fought hard for the company and was surprised by its plans, which he described as waving the "White Flag". To avoid this cost, the company will shift to countries where there are lower or no tariffs.

Meanwhile, the maker of Jack Daniel's, Brown-Forman Corp., said Monday it would have to raise the price of its product sold in the European Union because of the tariff hike, Bloomberg reported. "No, it's not surprising at all", said Scott Lincicome, an worldwide trade attorney and an adjunct scholar at the Cato Institute who has been critical of Trump's approach.

Europe is Harley-Davidson's second biggest market after the US.

Wisconsin's elected leaders said the decision pointed to the need to expand markets. At a briefing Monday, press secretary Sarah Huckabee Sanders said Trump was trying to undo years of trade restrictions imposed on the United States by other countries.

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