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Harley-Davidson to shift some production out of United States over European Union tariffs

26 June 2018

Harley-Davidson said that it will not raise its prices due to "an immediate and lasting detrimental impact to its business in the region", although the tariffs are adding about $2,200 in costs per motorcycle exported from the U.S.to the EU. That's expected to add up to a burden of $90 million to $100 million annually, which Harley-Davidson will absorb rather than pass extra costs on to customers.

"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.

Harley-Davidson sold nearly 40,000 motorcycles in the European Union past year, generating revenue second only to the U.S. sales, according to the Milwaukee-based company.

Harley-Davidson now has overseas manufacturing plants in Brazil, India and Australia and is building a plant in Thailand.

Harley-Davidson plans to move a sizable portion of the motorcycles it produces outside of the U.S., blaming the escalating tariff war for spiraling costs in one of its biggest markets.

Trump on Monday expressed disappointment at Harley-Davidson's plan.

Trump hosted chief executive Matt Levatich and other Harley executives and union leaders for a White House listening session in February 2017 and hailed the motorcycle maker as "a true American icon" and "one of the greats".

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President Trump had previously thanked Harley-Davidson for staying in America, while criticizing other firms for moving production outside the U.S.

Trump vowed to make the iconic motorcycle maker great again when he took office previous year. On Friday, it began new tariffs on around $3.4bn worth of USA products being brought into the EU.

Trump praised Harley-Davidson as an "American icon, one of the greats" and expressed confidence the company would expand U.S. manufacturing under his administration. Taxes just a Harley excuse - be patient!'

Mr Trump said Harley-Davidson was "waving the white flag".

The European tariffs have jumped from 6 percent to 31 percent, the company said.

Donald Trump has slammed Harley-Davidson after it elected to move some of its production overseas.

A Harley-Davidson spokesman said the company had nothing to say in response to Trump's tweet beyond its filing with the U.S. Securities and Exchange Commission.

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"We are extremely anxious about the consequences of a trade war and are urging the White House to not advance with this plan", Ryan's spokeswoman, AshLee Strong has previously revealed.

Moving production overseas is expected to require nine to 18 months, meaning that in the near term the company will absorb the costs of higher European Union tariffs. Harley-Davidson, based in Milwaukee, employed 5,800 workers at the end of 2017.

Earlier this year, Trump imposed unilateral tariffs on steel and aluminum imports.

"Harley-Davidson's announcement today is the latest slap in the face to the loyal, highly-skilled workforce that made Harley an iconic American brand". The tactic is meant to give USA factories producing those raw materials a better chance, because they'll be competing against importers who now have additional tariff costs.

Harley-Davidson, which has been focused on expanding its overseas sales, said it remained committed to USA manufacturing. The company maintains facilities in Brazil, India and Thailand where it completes assembly of motorcycles for sales in those and other markets.

Additionally, retaliatory tariffs from the EU, Canada, Mexico, and more make it expensive to get finished goods into those markets.

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Harley-Davidson to shift some production out of United States over European Union tariffs