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Harley to shift some production overseas, Walker pushes for ending all tariffs

26 June 2018

Harley-Davidson expects these tariffs will result in an incremental cost of approximately $2,200 per average motorcycle exported from the the EU.

In the near term, Harley-Davidson will instead absorb most of the cost of moving the production of motorcycles overseas.

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

Harley announced Monday that because of the European Union's new tariffs on United States motorcycles - which came in retaliation for Trump's steel and aluminum tariffs - the company was shifting some production to non-US plants.

The United States says it is imposing the tariffs on steel and metal worldwide in order to protect America's metal industries.

A USA motorcycle sales slump has deepened since then, spurring Harley's decision in January to close a plant in Kansas City, Missouri, eliminating about 260 jobs. The company said the shift will require additional investment and could take nine to 18 months to complete.

"The Chinese get a pass and we pay a price", said Skarich. While numerous company's efforts to grow its brand focus on Asia, the European market remained the second largest after the US with about 40,000 in retail sales previous year.

A week after pulling the USA out of the TPP, the president hosted Levatich and other Harley executives and union leaders for a White House listening session and held the motorcycle maker out as an "American success story since 1901".

The iconic American motorcycle maker's decision to increase overseas production has drawn the wrath of US President Donald Trump, who accused Harley-Davidson of surrendering before his trade war could even start.

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

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Harley said ramping-up production at its overseas global plants will require incremental investments and could take at least nine to 18 months.

Passing along that cost to consumers would have "an immediate and lasting detrimental impact" to Harley-Davidson's sales in Europe.

Harley-Davidson's stock, and the Dow Jones as a whole, dipped Monday morning as trade-war fears mounted.

President Donald Trump arrives to meet with Harley Davidson executives and union representatives on the South Lawn of the White House in Washington, D.C., February 2, 2017.

The Harley move represented a slap in the face for Trump. This news comes less than a week after the European Union retaliated to the Trump administration by imposing tariffs on American imports such as motorcycles, orange juice, bourbon, boats, cigarettes and denim products to the tune of $3.4 billion.

Last week the European Union imposed tariffs on U.S. goods including bourbon whiskey, orange juice and motorcycles.

Quartz reports that the overall cost to Harley Davidson is expected to reach $100 million.

It believes that cost to be about $2,200 per bike it exports from the USA to the EU.

With China and the European Union combining to slap the United States with more than $60 billion in tariffs, the end of the trade war is nowhere in sight and other countries including Canada and Mexico will likely step up their efforts in the coming months.

Harley to shift some production overseas, Walker pushes for ending all tariffs