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

Harley-Davidson to shift some production out of US over EU tariffs

Harley-Davidson to take big hit from EU tariffs

Harley-Davidson, based in Milwaukee, employed 5,800 workers at the end of 2017.

The company said the EU's tariff increase - to 31%, from the current 6% - would increase the cost of every motorcycle shipped from the USA to Europe by $2,200.

Harley-Davidson said Monday it will move production of its motorcycles headed for European Union customers outside the United States to avoid a new tariff. Now, lawmakers are weighing in.

Known stable genius and president of these United States Donald J. Trump has been facing a bit of backlash lately due to his little trade war and the tariffs contained therein.

The move conflicts with the Trump administration's touting of the United States economy's strength.

The Associated Press reports that while President Donald Trump is pointing to Harley as a prime example of an American business as those hurt by trade barriers, the bike maker has regularly warned against imposing tariffs.

Harley is not raising bike prices for customers or retailers.

The tariffs, which took effect Friday, are retaliation for taxes President Donald Trump imposed on European Union shipments of steel and aluminum.

"So thank you, Harley-Davidson, for building things in America", Trump said at the time. Since then, he's increased tariffs on the EU, Mexico, Canada and China, and promised additional fees in response to any retaliation.

It is worth mentioning that Harley could make the decision to shift production because it had chosen, in 2017, to open a new manufacturing plant in Thailand.

"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.

"Unfortunately, this confirms my concerns and is a far too predictable outcome of policies that give companies like Harley-Davidson incentives to make their products elsewhere".

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"We can not speculate about how this morning's announcement will impact employment in the U.S. Domestic sales are what drive production and employment at Harley's U.S. facilities".

Reaction to the company's announcement suggested that the EU's strategy of targeting products made in politically-important states in its response to Trump's metals tariffs was succeeding, according to Edward Alden, a senior fellow at the Council on Foreign Relations. Harley started planning to build a production plant in Thailand years ago specifically to serve that market while avoiding a 60% import tariff.

"Harley-Davidson maintains a strong commitment to US-based manufacturing which is valued by riders globally", the company said in prepared remarks.

Despite Trump's assertion that "trade wars are good, and easy to win", however, Harley isn't so impressed.

Indeed the idea of an "iconic" American brand moving even part of its manufacturing overseas is the polar opposite kind of headline the Trump administration likely wants to see - and yet it is the direct result of its own aggressive trade tactics with Europe.

"Surprised that Harley-Davidson, of all companies, would be the first to wave the white flag", Trump tweeted.

CBS 58 reached out to Harley for a statement and have not heard back. There's disagreement on the impact on jobs.

"Harley-Davidson expects ramping up production in global plants will require incremental investment and could take at least nine to 18 months to be fully complete", the company said.

The motorcycle manufacturer, founded in 1903, has factories in Kansas City, Missouri; York, Pennsylvania; Menomonee Falls and Tomahawk in Wisconsin.

It said it would raise investment in its worldwide plants, though it did not say which ones. The Motor Company has chose to, get this, move a bunch of production to Europe to avoid European import tariffs.

"We are now assessing the potential impact on our U.S. facilities", said Harley-Davidson spokesman Michael Pflughoeft.

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