European Union import tariffs force Harley to rethink

Posted June 28, 2018

However, local United States media reported in May that a labor union for Harley-Davidson suggested some Kansas City jobs would move to Thailand - a move the company denied. But Harley-Davidson had warned past year against responding to foreign trade barriers with higher American tariffs, saying the levies could negatively impact sales.

It was unclear what taxes Trump was referring to, and why the company might have to pay them, since it will maintain production in the United States for US customers. But the company insisted at the time that it was not planning to relocate the jobs overseas to a planned Thailand plant it had previously announced in May of 2017.

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

Another source of confusion is where motorcycles manufactured outside of the USA will be sold. That's to say nothing of the enormous selling point of "Made in the USA" which is very important to H-D's fiercely loyal and often patriotic fan base.

European Commission Vice President Jyrki Katainen said unilateral action by Mr. Trump in disputes over steel, China's technology policy and other issues highlighted the need to modernize the World Trade Organization to reflect developments in the world economy.

President Donald Trump says he's surprised that Harley-Davidson was first "to wave the White Flag" in a tariff dispute between the USA and the European Union. In fact, Harley-Davidson said it was shifting those Kansas City jobs to another factory in the USA - in York, Pennsylvania.

United Steelworkers, which represents some Harley employees and has supported some of the president's tariff announcements, said it does not know yet how the company's decision will affect U.S. employment. The E.U. Friday instituted almost $3.3 billion worth of taxes on imports from the United States, including Harley-Davidson motorcycles, in response to the Trump administration's 25 and 10 percent tariffs on steel and aluminum, respectively, imposed in late May.

But Trump may be mistaken about the company's Thailand plant. Moreover, the European Union is highly unlikely to pursue Harley Davidson specifically. Demand for motorcycles has declined for each of the last three years among American buyers and is likely to decline in 2018 as well, Wedbush noted. "But tariffs are just a fact of life", he said. "That was long before Tariffs were announced".

Johnson is also a former employee of Harley Davidson in West Fargo, where he was a parts manager for 14 years.

Harley-Davidson said that shifting targeted production from the U.S.to worldwide facilities could take at least nine to 18 months to be completed.

"Increasing global production...is not the company's preference", the statement said. The closure led to a loss of about 260 U.S.jobs.

Trump also suggested Tuesday morning that his adversarial approach to trade policy had only begun.

While Harley-Davidson had been struggling financially well before the EU's retaliatory tariffs went into effect, the import duties of 25% certainly didn't help matters.

Lincincome adds that, in many cases, manufacturers that can afford to offshore their production may choose to do so.

Europe is now the fastest-growing market for the iconic American brand. As for the company's true motives, there's no way to know for sure.

Harley-Davidson shares closed down 0.6 percent at $41.32, after falling almost 6 percent on Monday. Could Trump's tweets make a dent in H-D sales? "It's going to be so easy!" he told a roomful of manufacturers in Dayton, Ohio, adding this reassurance: "We're not going to have trade wars". That makes it a symbolic target for foreign leaders looking to hit back at America in a trade war.