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

26 June, 2018, 15:31 | Author: Barbara Daniel
  • Harley-Davidson To Move More Production Oversees Amid US-EU Trade Tensions

Harley-Davidson, which Trump has cited in the past as a company hurt by USA trade regulation, said the increased tariffs would cost the company an extra $30 million to $45 million in 2018.

The company said ramping up production in worldwide plants would require incremental investment and could take at least nine to 18 months to be fully complete.

The EU is Harley's most important market outside of the USA, accounting for 40,000 sales in 2017.

"Harley-Davidson maintains a strong commitment to US-based manufacturing which is valued by riders globally".

"The European Union is attempting to punish U.S. workers with unfair and discriminatory trade policies, and President Trump will continue to push for free, fair and reciprocal trade in hopes that the EU will join us in that", Sanders told reporters at the White House.

But then, unbidden, came the trade war.

"Motorcycles" don't even merit a mention in the Indian Ministry of Commerce and Industry's data on exports to the United States, as The Post's Annie Gowen wrote in February, so the tariffs Trump has threatened to impose would essentially have nearly zero impact.

He says the ultimate goal should be no tariffs.

Harley shares have lost about 6 per cent since early March when the trade skirmish between the United States and the European Union started, and are down over 15 per cent since the end of 2017.

It anticipates the cost for the rest of the year to be approximately $US30 million ($40 million) to $US45 million ($61 million).

"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".

Trump, however, deflected blame today via a tweet, citing taxes as being nothing more than an excuse on the part of Harley Davidson.

"Thank you, Harley-Davidson, for building things in America", Trump said at the time.

The company's move is one of the most visible consequences of the trade disputes triggered by Mr Trump's decision to levy tariffs on steel and aluminium imports.

The statement seemed to suggest that the president expects to negotiate a resolution of his complaints about EU trade practices, which he blames for the $151 billion US merchandise trade deficit with its European allies. However, on May 31 the White House announced that those exemptions would be ending at the end of the day.

Follow Harley-Davidson's stock price in real-time here.

The new global production facilities could take at least nine to 18 months to be completed.

In January, Harley-Davidson announced that it would be closing its plant in Kansas City and moving leftover production to York, Pennsylvania.

Harley-Davidson will not raise its prices to avert "an immediate and lasting detrimental impact" on sales in Europe, it said. It also has manufacturing operations in Australia, Brazil, India and Thailand.

Additionally, retaliatory tariffs from the EU, Canada, Mexico, and more make it expensive to get finished goods into those markets. But he says the ultimate goal is the removal of all tariffs so "we don't have this tit for tat on any number of products out there". Still, it's worth noting that the company has scaled back its American production lines in recent years in favor of opening a new plant in India, where motorbikes are highly sought, to get around a massive import tariff imposed there.

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