Harley-Davidson will shift some production outside the U.S. to avoid tariffs
Jun 26 2018
Each motorcycle will cost an average of US$2,200 extra after the European Union raised its tariff on imported USA bikes to 31 percent from 6 percent on June 22, the Milwaukee-based manufacturer said Monday in a regulatory filing.
Harley-Davidson's move is some of the most direct evidence yet that tit-for-tat trade fights between the United States and other countries have consequences for American companies. The company has warned the president's tariffs on steel and aluminum will drive up raw materials costs.
"The European Union is trying to punish US workers because they have engaged repeatedly in unfair trade practices and the president is saying enough is enough", she said.
The motorcycle manufacturer, founded in 1903, has factories in Kansas City, Missouri; York, Pennsylvania; Menomonee Falls and Tomahawk in Wisconsin.
Aram... The Trump administration's duties on European goods led to these retaliatory tariffs... and it seems to be backfiring on American companies...
Harley-Davidson Inc. sold nearly 40,000 motorcycles in the European Union previous year, its second-largest market after the United States, according to the company. "Europe is a critical market for Harley-Davidson".
Harley-Davidson said Monday that European Union tariffs on its motorcycles had increased to 31 per cent from 6 per cent.
Harley-Davidson now has overseas manufacturing plants in Brazil, India and Australia and is building a plant in Thailand.
Walker says that's what he will push for in the wake of news that Harley-Davidson is shifting production of motorcycles headed for Europe from the U.S.to factories overseas due to increasing tariffs.
Passing along that cost to consumers would have "an immediate and lasting detrimental impact" to Harley-Davidson's sales in Europe.
European and U.S. stock markets all plummeted on Monday amid fears the world was heading towards an all-out trade war. The motorcycle maker tied its higher costs to a sequence started by Trump, who slapped tariffs on European steel and aluminum, prompting the EU's retaliation. Harley's motorcycles division employs about 5,200 workers.
The company chose to build the Thailand plant in response to Trump's decision to pull out of the Trans-Pacific Partnership, which would have lowered import tariffs on its bikes in some of the fastest-growing motorcycle markets in Asia.
"So thank you, Harley-Davidson, for building things in America", Trump said at the time.
Harley said Monday that the increased costs from the import taxes are threatening its worldwide sales and could cost the firm 90 to 100 million dollars a year.
Mary Lovely, a senior fellow at the Peterson Institute for International Economics, and Yang Liang, a graduate associate at the Moynihan Institute of Global Affairs, highlighted the possibility that companies will abandon the USA in a recent policy paper.