Trump warns Harley-Davidson against moving production out of the US

The conflict took another turn on Monday when Harley Davidson, the iconic U.S. motorbike manufacturer, announced that it would shift production out of the country to avoid the scuffle between Trump and the EU. Trump blasted Harley-Davidson in remarks Tuesday afternoon, accusing them of using the tariffs as an "excuse".

Trump further went on say: "We are finishing our study of Tariffs on cars from the E.U.in that they have long taken advantage of the U.S.in the form of Trade Barriers and Tariffs".

It had already announced plans to close a plant in Kansas City, Missouri - a decision which workers claimed was due to the opening of a new facility in Thailand.

The Milwaukee-based company said in a public filing Monday that it would need to move production overseas because of tariffs being imposed in Europe against US -made motorcycles.

"For Harley to be forced to move production out of the country because of the tariffs is very damaging to Trump's repeated claim that his trade, tax and regulatory policies will get companies to boost their United States investments and create good manufacturing jobs", Edward Alden, senior fellow at the Council on Foreign Relations, told Business Insider.

On Monday, Harley-Davidson announced it is moving some production overseas because of retaliatory measures from the European Union against Trump's duties on steel and aluminum from the bloc.

Milwaukee-based Harley said Monday that European Union tariffs on its American-made motorcycles jumped between 6 percent and 31 percent as a result of the escalating trade war, adding about $2,200 in cost to the average Harley sold in the EU.

"Harley-Davidson maintains a strong commitment to US -based manufacturing which is valued by riders globally", the company said in prepared remarks. 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.

US President Donald Trump tweeted his disappointment at Harvey-Davidson's decision which he characterised as the company waving the white flag of defeat.

The company has repeatedly described the Thailand factory, along with other overseas production, as vital to its long-term need to boost foreign markets to make up for sluggish sales in the US. In fact, Harley-Davidson said it was shifting those Kansas City jobs to another factory in the USA - in York, Pennsylvania. "Shows how unbalanced & unfair trade is, but we will fix it".

"People might think this is a smart economic move, but how many manufacturing plants are going to be moving over?"

"The president's trade and economic policies have been a huge benefit to the American economy, and this includes the creation of over 300,000 manufacturing jobs. Harley-Davidson expects ramping-up production in worldwide plants will require incremental investment and could take at least nine to 18 months to be fully complete".

Johnson is also a former employee of Harley Davidson in West Fargo, where he was a parts manager for 14 years. Europe represents the largest market for Harley-Davidson motorcycles outside the USA, and the relocation of manufacturing is seen as a better long-term solution to sustaining the company's business ventures in the area.

Harley-Davidson also announced it would be raising investments in the new chosen locations. Harley executives previously said price increases from the steel and aluminum tariffs could add up to $20 million in raw material costs this year. "On a full-year basis, the company estimates the aggregate annual impact due to the European Union tariffs to be approximately $90 to $100 million". He is riding his Harley to Nova Scotia and stopped at 1 Capital Harley-Davidson in York County Tuesday afternoon. "These sweeping tariffs are not examples of that by a long shot".

  • Eleanor Harrison