Harley-Davidson To Move More Production Oversees Amid US-EU Trade Tensions

It will not pass on the cost of tariffs to its customers as that would have a lasting detrimental impact to its business in the region, its second biggest market, the company said.

Bikes destined for the European Union were made less viable by levies that'll boost costs for the company by about US$100 million (NZ$145 million) a year.

The company, which sold almost 40,000 motorcycles in Europe a year ago, said it planned to absorb those costs rather than pass them on to customers and risk damaging sales.

Instead, it will eat $30 million to $45 million for the rest of this year and $90 to $100 million annually.

Shares of Harley-Davidson had fallen 6.4 percent to $41.37 in early afternoon trading.

Still. It's unlikely the news will lose Harley-Davidson any fans it hasn't already lost to cheaper, smaller and more reliable brands that are often foreign-owned. The decision to close the Kansas City plant will result in about 260 American manufacturing workers losing their jobs.

Last week, the European Union imposed penalties on $3.2 billion worth of U.S. products, many of which are produced in areas that form the heart of U.S. President Donald Trump's political base, in response to steel and aluminum tariffs added by the White House. If Nafta were to break up, and change that dynamic, it would likely hurt US companies.

The move is among the first signs that Trump's use of tariffs, which he has promoted as a way to boost employment in the steel and aluminum industries, is hurting other American businesses.

President Trump with Harley-Davidson CEO Matthew Levatich in 2017. So if prices jump, more jobs are at risk than are likely to be gained.

Initial reaction from prominent Republicans on Capitol Hill highlighted unease with the president's tactics.

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

The decision by the motorcycle behemoth is the most high profile to date as the trade dispute between the USA and the European Union heightens.

Laura Clawson is the Labor editor at Daily Kos Labor, and a contributing editor at Daily Kos.

"It's not just us".

Europe is becoming more important to the company as United States sales slump. The stock is down 18 per cent this year.

Skarich voted for Trump, as did 79 percent of surrounding Butler County.

Lovely said Harley and other companies face retaliatory tariffs in Europe and elsewhere if they try to export products.

It said the cost for the remainder of 2018 would amount to $30m to $45m. Who knows? Since no one in the White House seems to understand how global trade works, and we've seen how capricious and easily distracted The Donald is, it's 50/50 whether or not the tariffs go into effect or he gets distracted by a squirrel and forgets all about them.

"I think you're going to even expand - I know your business is now doing very well and there's a lot of spirit right now in the country that you weren't having so much in the last number of months that you have right now", the president added. Trump's tariffs also raise costs on imported parts they need to manufacture in the United States.

  • Eleanor Harrison