Harley-Davidson moves motorcycle production away from United States to avoid European Union tariffs

The idea of Harley-Davidson sending jobs overseas doesn't sit well with many, including some union officials, motorcycle owners and even President Donald Trump.

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

Trump's tirade continued Tuesday morning, warning Harley-Davidson that "they won't be able to sell back into US without paying a big tax!".

Harley-Davidson's warning is a huge blow for the Republican President, who says he is safeguarding jobs in the US's industrial hotspots.

"They'll be, actually, for over there, they're going to try to go around the tariff tax that way", Capra said.

President Donald Trump on Tuesday renewed his attacks on Harley-Davidson, accusing the motorcycle manufacturer of using the trade war as an "excuse" to move production for the European market out of the United States. "Harley must know that they won't be able to sell back into US without paying a big tax!"

Minutes later, Trump tweeted that the US was "expanding" its "footprint" in the global trade market, warning countries to "play fair" or "pay tariffs". The company's decision surprised Trump who has been continually raising the issue of high import tariffs on the motorcycle manufacturer elsewhere. In the U.S., Harley-Davidson sold 147,972 motorcycles a year ago, according to company data. In early 2018, the motorcycle manufacturer said it would be forced to close a factory in Kansas City and downsize production at a facility in York, Pennsylvania, a move that cut roughly 260 jobs, due to weakening bike sales overseas.

The Europeans are targeting iconic US products like motorcycles, blue jeans and bourbon in retaliation for Trump's tariffs on European steel and aluminum. "Hence, they were just using Tariffs/Trade War as an excuse", Trump said. "That means we have to make America the best country on Earth to do business, and that's what we're in the process of doing".

But Trump's policies seem to have put Harley-Davidson in a particularly tough spot, for seven reasons.

Harley-Davidson now has overseas manufacturing plants in Australia, Brazil and India.

Lange said USA lawmakers would hopefully "intervene and take back certain powers from the president, such as the competence to launch 232 national security investigations, and bring it back under control of the Congress".

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"It's unfortunate that such a strong Wisconsin company like Harley-Davidson has to bear the brunt of this trade dispute", Sensenbrenner said.

Harley-Davidson did not respond to requests for comment for this story.

Trump said he's getting other countries to reduce and eliminate tariffs and trade barriers, and to open up markets.

The company reiterated today that it was moving some production of motorcycles destined for sale in the European Union to its existing worldwide facilities to "address the additional tariffs imposed by the European Union".

The company did not say where production would be shifted, or how many jobs might be affected, but said the move would take nine to 18 months to complete.

"Companies are now coming back to America".

Jared Bernstein, a top economic adviser to Joe Biden when he was vice president, said Trump's tariffs reveal a lack of understanding of the modern global economy, which has both mobile capital and mobile production capacity.

USA president insists European Union will drop its retaliatory tariffs.

Trump is correct that Harley-Davidson being an American-made motorcycle is a significant part of the brand's appeal here.

Quartz reports that the overall cost to Harley Davidson is expected to reach $100 million. That makes the market second to the US.

(Copyright © 2015. All Rights Reserved.)
 
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