US Dollar's "Safe Haven" Status at Risk from "Trade War" say ING

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When the President of the United States Donald Trump threatened to escalate a trade war with Europe by imposing a 20 percent tariff on all USA imports of European Union-assembled vehicles via Twitter, European Auto Stocks Index immediately reacted, cratering. "Their employees and customers are already very angry at them", Trump said on Twitter, without providing any evidence. If they move, watch, it will be the beginning of the end - they surrendered, they quit! "I fought hard for them and ultimately they will not pay tariffs selling into the European Union", U.S. President Donald Trump tweeted on Monday, urging the company to "be patient".

Trump reminded followers that Harley-Davidson wanted to move their plant operations to Thailand long before the tariffs were announced.

On March 1, President Donald Trump announced that the USA would be imposing steep tariffs on all imports of steel and aluminum into the United States.

The company said that retaliatory European taxes on imported motorcycles will have a "significant impact" on its business, increasing the cost of motorcycles by $2,200 on average, so has chose to move production elsewhere. As the European Union is Harley-Davidson's second-largest market, accounting for almost 40,000 motorcycle sales in 2017 alone, it is a market the company clearly does not want to lose. Harley-Davidson said Monday that the E.U.'s action increased the tariffs on its motorcycles "from 6 percent to 31 percent".

Harley-Davidson says it will not raise its prices to avert "an immediate and lasting detrimental impact" on sales in Europe.

On Monday, Mr Trump said the iconic maker of motorcycles had waved the "White Flag" after he had fought hard for the company.

Trump vowed to make the iconic motorcycle maker great again when he took office past year. To refresh your memory, H-D is shutting down its manufacturing facility in Kansas City, which is expected to result in a net loss of about 400 jobs as some of the manufacturing gets rolled into the company's Pennsylvania plant.

Increasing foreign investment in the United States, something Walker was in Washington advocating for at a U.S. Department of Commerce event last week, will also help reduce the trade imbalance and need for tariffs, he said.

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The plant, which is in the Northland near Kansas City International Airport, was built in 1998 and employs about 800 people. But by Tuesday morning, he was in a more vengeful mood.

Harley said ramping up production overseas could take at least nine to 18 months.

Europe is becoming more important to the company as U.S. sales slump. "Made in America. Harley-Davidson". Instead of raising the manufacturer's suggested retail price to cover the costs of retaliatory tariffs, Harley will eat the costs itself.

Harley-Davidson said it had no comment on the president's tweets. "That was long before the tariffs were announced", the President went on.

President Donald Trump after greeting Harley-Davidson executives on the South Lawn of the White House, February 2, 2017.

Alden said that given those two compelling economic cases, Harley-Davidson could be just the start of a series of manufacturing relocations outside the US. Union officials have said those jobs are going to Thailand, something Harley-Davidson denies.

"Harley-Davidson's announcement today is the latest slap in the face to the loyal, highly-skilled workforce that made Harley an iconic American brand", said Robert Martinez Jr., president of the International Association of Machinists and Aerospace Workers.