Harley Davidson to move production FROM the US in response to tariffs

Harley Davidson to move production out of the US in response to EU tariffs that would cost up to $100M per year

  • Harley-Davidson will see its costs increase by as much as $100 million a year due to retaliatory EU tariffs imposed last week, in response to statements by Trump
  • Trump defended his pending tariffs against Chinese products and his threat to impose tariffs against European allies in a speech from Las Vegas on Saturday
  • Trump previously praised Harley-Davidson as an ‘American icon, one of the greats’ that he said would expand US manufacturing under his administration
  • It’s thought that comment made the company a target for EU retaliation 
  • European Commission Vice President for trade Jyrki Kataine said that motorcycles, bourbon and blue jeans have ‘a strong symbolic political impact’

Harley-Davidson plans to shift some manufacturing of its iconic motorcycles overseas to avoid retaliatory European tariffs imposed last week, the company said on Monday.

The European Union hit the American motorcycle giant with duties of 31 percent on Friday, up from six percent, boosting the cost to EU consumers by about $2,200.

The EU targeted the US vehicles as part of its rebuttal to President Donald Trump’s tariffs on imported aluminum and steel, one aspect of his multi-front trade war.

Harley-Davidson plans to shift some manufacturing of its iconic motorcycles overseas to avoid retaliatory European tariffs imposed last week, the company said on Monday

‘Harley-Davidson maintains a strong commitment to US-based manufacturing which is valued by riders globally,’ the company said.

‘Increasing international production to alleviate the EU tariff burden is not the company’s preference, but represents the only sustainable option to make its motorcycles accessible to customers in the EU and maintain a viable business in Europe.’ 

Not wanting to dent sales in key EU markets, the company will ‘bear the significant impact resulting from these tariffs,’ which will add an estimated $30 to $45 million in costs for the remainder of 2018 and $90 to $100 million annually.

Moving production to overseas factories is expected to require nine to 18 months, so in the near-term Harley-Davidson will absorb the costs of EU tariffs, the company said in a regulatory notice.

In a wide-ranging speech on Saturday at the Republican Party Convention in Las Vegas, Trump defended his pending tariffs against Chinese products and his threat to impose tariffs against European allies, specifically calling out German auto makers Mercedes and BMW.

‘The trade stuff is coming along, just starting. But gonna happen,’ Trump said. ‘We’re a piggy bank that everybody likes to rob from, they like to steal from.’

‘We probably lost $500 billion in trade with China last year,’ Trump said.

President Donald Trump defended his pending tariffs against Chinese products and his threat to impose tariffs against European allies in a speech from the Suncoast Hotel & Casino at the Republican Party Convention in Las Vegas on Saturday; Trump is seen here attending a round table discussion on tax reform in Las Vegas on Saturday

The US trade deficit in goods with China was $376billion in 2017. On July 6, the United States is set to slap tariffs on $34billion in Chinese goods to punish Beijing for theft of intellectual property.

Trump also took fresh shots at NAFTA and European allies.

‘NAFTA has been a disaster for our country… We are renegotiating NAFTA. It’s got to be a fair deal. We cant do this anymore,’ he said.


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Trump said that Canadian Prime Minister Justin Trudeau is ‘a nice guy’ but we ‘can’t have’ the trade imbalance. Last year the US had a $17billion trade deficit in goods with Canada.

‘We are working on Canada, we are working on Mexico. We are working on the European Union,’ he said.

Europe is Harley-Davidson’s second biggest market after the US. The company reported $521.8 million in earnings in 2017 on $5.6 billion in revenue.

Executives in Harley-Davidson were among the first to visit the White House in February 2017 shortly after Trump took office.

Trump praised Harley-Davidson as an ‘American icon, one of the greats’ and expressed confidence the company would expand US manufacturing under his administration.

European Commission Vice President for trade Jyrki Kataine (pictured) said that motorcycles, bourbon and blue jeans have ‘a strong symbolic political impact;’ Kataine is seen here giving a press conference on legislative measures to fight against single use plastics at the EU headquarters in Brussels on May 28

This file photo shows motorcycles on display at the Oakland Harley-Davidson dealership in Oakland, California on April 14, 2017

But that status made the company a target for EU retaliation, along with bourbon and blue jeans.

The products have ‘a strong symbolic political impact,’ said European Commission Vice President for trade Jyrki Katainen.

Katainen co-chaired the 7th annual EU-China High-level Economic and Trade Dialogue (HED) in Beijing on Monday, with China’s Vice-Premier of the State Council Liu He, who is responsible for the relations with the EU and the US.

The meeting took place ahead of the upcoming EU-China Summit, which is scheduled for June 29 in Brussels. 

‘I am confident that the exchanges we have had with my new counterpart, Liu He, have been useful in paving the way towards a successful EU-China Summit in the economic and trade field,’ Katainen said in a press release.

‘I am particularly pleased with the progress achieved in our investment negotiations and look forward to an exchange of offers at the Summit.’

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