Harley-Davidson move prompted by steel tariff, EU retaliation, TPP

Adjust Comment Print

The EU targeted the American motorcycles as part of its rebuttal to President Donald Trump's tariffs on imported aluminum and steel, one aspect of his multi-front trade war. Their employees and customers are already very angry at them.

"Harley-Davidson believes the tremendous cost increase, if passed onto its dealers and retail customers, would have an immediate and lasting detrimental impact to its business in the region, reducing customer access to Harley-Davidson products and negatively impacting the sustainability of its dealers' businesses", a Harley-Davidson regulatory filing said. "The Aura will be gone and they will be taxed like never before!".

President Donald Trump on Tuesday renewed his attacks on Harley-Davidson, accusing the motorcycle manufacturer of using the trade war as an "excuse" to move production for the European market out of the United States.

"Harley-Davidson maintains a strong commitment to USA -based manufacturing which is valued by riders globally", executives said. Shifting production to its non-U.S. plants will require additional investment overseas and is expected to take nine to 18 months, Harley said. Not for nothing, Harley-Davidson this year announced plans to close an assembly plant in Kansas City, Missouri, and consolidate its operations with a Pennsylvania facility. "Does Harley even understand what 'Made in America means?'" Martinez said.

The trade wars with the European Union are only the most recent act by the Trump administration that has forced Harley-Davidson to shrink its footprint in the US. Harley-Davidson has denied a link between Kansas City and Thailand. "We want to take money and put it back in the pocket of middle-class people", he said at the time. "They must play fair or they will pay tariffs!".

"It's unfortunate that such a strong Wisconsin company like Harley-Davidson has to bear the brunt of this trade dispute", Sensenbrenner said.

Harley-Davidson shares have lost about 9 per cent since early March when the trade skirmish between the United States and the European Union started, and are down over 18 per cent since end-December 2017.

Iran to reject Saudi-Russia proposal to increase oil production
A further 10 countries agreed to participate in Opec's supply cuts, with Russia, Kazakhstan and Mexico as the leading producers. Zanganeh has said that if OPEC returned to regular compliance, the group would raise output by around 460,000 bpd.

Trump said he's getting other countries to reduce and eliminate tariffs and trade barriers, citing India as an example, and to open up markets. The effect on Harley is staggering; duties have increased from 6% to 31%, which would raise the export cost of the average motorcycles by $2,200.

Greg Cramer of York said he would hate to see American jobs lost, but said he realizes "It's a company - all they care about is the bottom line".

Trump responded to that Tuesday morning with a blistering statement threatening the company with a tax if it failed to do as he wanted. So, since Harley will have a seriously hard time absorbing that cost in its second biggest world market, company bigwigs chose to increase production overseas.

On Monday, the vice president of the European Union's governing body said that Europe and China will form a group aimed at reforming worldwide trade rules. We are opening up closed markets and expanding our footprint. The European Union responded by placing tariffs on bourbon whiskey, jeans, and motorcycles, as Trump's approach to trade negotiations quickly turned into what many fear is becoming an global trade war. The tariffs became effective in mid-March, with exclusions for Mexico, Canada and 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.

Last week German automaker Daimler AG cut its 2018 earnings outlook, a change that it says is partly due to increased import tariffs for US vehicles in China.