Harley-Davidson moving USA production over European Union tariffs

Harley-Davidson Is Shifting Production Away From the U.S. As Trump's Trade War Rages On

Harley-Davidson shifts some production overseas as EU tariffs kick in

The EU levied the tariffs, which became effective on Friday, in response to increased US tariffs on European steel and aluminum.

"Harley-Davidson maintains a strong commitment to USA -based manufacturing which is valued by riders globally", said the company.

Ramping up output in global plants for the European Union may take at least nine to 18 months, according to the company.

Production of Harley-Davidson motorcycles sold in Europe will move from US factories to facilities overseas, the Milwaukee-based company announced Monday, a effect of the retaliatory tariffs the European Union is imposing on American exports in an escalating trade war with the Trump administration.

Harley-Davidson announced today that it is shifting more production overseas to avoid getting caught in President Donald Trump's trade war with the European Union.

"We are now assessing the potential impact on our USA facilities", Harley-Davidson spokesperson Michael Pflughoeft told Bloomberg.

"For Harley to be forced to move production out of the country because of the tariffs is very damaging to Trump's repeated claim that his trade, tax and regulatory policies will get companies to boost their USA investments and create good manufacturing jobs", Edward Alden, senior fellow at the Council on Foreign Relations, told Business Insider. The stock is down 17 per cent this year.

In the wake of the sluggish United States sales, Harley-Davidson announced in January it would close its Kansas City, Missouri assembly plant and consolidate jobs in York, Pennsylvania.

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.

Monday's news comes roughly a year into Harley-Davidson's "The Journey" program.

The new taxes are meant to answer tariffs the Trump administration is requiring on steel and aluminum imports from Europe.

Harley's move is an example of what economists say will be a significant long-term problem with the tariffs and represents a black eye for Trump's arguments in favor of the measures.

Powersports companies in general are vulnerable to the "dangerous game of chicken being played by the Trump administration and foreign trade officials", said a note earlier this month by Wedbush Securites analyst James Hardiman. And in recent years, Harley-Davidson has been courting a younger, more culturally diverse audience anyway-people less likely to have ties to factory workers in Wisconsin and Kentucky who will soon be out of work.

The company is already struggling with falling sales.

On Monday, the vice president of the EU's governing body said that Europe and China will form a group aimed at updating global trade rules to address technology policy, government subsidies and other emerging complaints in a bid to preserve support for worldwide commerce. Analysts at Moody's reckon a 25 percent tariff on imported vehicles and parts would be negative for most of companies including Ford Motor Co and General Motors Co.

"This is further proof of the harm from unilateral tariffs", AshLee Strong, a Ryan spokeswoman, said Monday.

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