Harley-Davidson said on Monday it would move production of motorcycles shipped to the European Union from the United States to its worldwide facilities and forecast the trading bloc's tariffs would cost the company $90 million to $100 million a year.
President Donald Trump opened up on Harley-Davidson in a series of tweets Tuesday, warning the iconic motorcycle manufacturer that if it moves some production overseas, "it will be the beginning of the end".
"Increasing worldwide production to alleviate the European Union tariff burden is not the company's preference, but represents the only sustainable option to make its motorcycles accessible to customers in the European Union and maintain a viable business in Europe", the company said in a statement. After the USA imposed duties on aluminum and steel coming in from Europe, the European Union imposed tariffs on 2.8 billion euro ($3.2 billion) of United States imports.
But the company's Securities and Exchange Commission (SEC) filing Monday directly cited retaliatory tariffs from the European Union as motivating its transfer of motorcycle production for "E.U. destinations" to "international facilities".
Instead, it will eat $30 million to $45 million for the rest of this year and $90 to $100 million annually.
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Republican Senator Ben Sasse placed the blame for Harley-Davidson's partial relocation squarely on Trump's shoulders.
Some analysts expect to see more instances of company shifts when the second-quarter earnings season kicks off next month. The EU tariff comes In response to the United States implementing a tax on aluminum and steel to several countries, including EU nations.
But Trump took issue with that on Tuesday.
Just minutes before. he wrote: "Early this year Harley-Davidson said they would move much of their plant operations in Kansas City to Thailand".
Harley-Davidson on Monday announced the company would move production of European-sold motorcycles overseas to avoid the increased tariffs imposed on American imports. "Hence, they were just using Tariffs/Trade War as an excuse", Trump tweeted.
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Chief Executive Officer Matt Levatich said in April that the factory in Thailand was a "Plan B" that Harley employed after the US abandoned the 11-country Trans-Pacific Partnership free-trade agreement Trump withdrew from a year ago.
Trump has been imposing import duties on wherever he felt Americans had not been given a fair deal, thus triggering a trade war with numerous US' trade partners. He could be referring to the tariffs he is attempting to unilaterally impose on foreign imports.
In fact, Trump has tried to threaten numerous countries with tariffs if they don't reduce tariffs and other trade barriers, but so far most of those discussions have ended in acrimony and frustration.
Americans are buying fewer motorcycles, people outside the United States are buying more, and Harley wants to build bikes closer to its worldwide customers.
"I fought hard for them and ultimately they will not pay tariffs selling into the European Union, which has hurt us badly on trade, down $151 Billion". We are opening up closed markets and expanding our footprint. He had increased import duties on aluminum and steel, and this increased its manufacturing cost by some $20 million.
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Trump recently imposed steep tariffs on aluminum and steel imported from Canada, Mexico and Europe in his bid to level the trade playing field and reduce trade deficits between the US and its trade partners.