Harley-Davidson to Outsource More US Manufacturing Jobs, Trump Calls Move 'Excuse'

Logo of U.S. motorcycle company Harley Davidson

US trade policy drives Harley Davidson to create EU jobs

Milwaukee-based Harley-Davidson Inc. will shift production of motorcycles for Europe to its worldwide facilities to avoid up to $100 million annually in costs from tariffs applied by the European Union.

Harley-Davidson said it would raise investment in its global plants, though it did not say which ones, adding that it expected the increase in production to take nine to 18 months.

The company sold nearly 40,000 motorcycles in the European Union a year ago, generating revenue second only to the United States, according to the Milwaukee company. In addition to four US-based manufacturing facilities, Harley operates plants in Australia, India, Brazil, and Thailand.

Harley-Davidson said the EU's new tariffs on US-made motorcycles would drive up costs and force the company to shift a sizable portion to its production outside of the United States to avoid the tariff.

Trump's tweet on Monday is a sign the administration will continue placing blame on United States trading partners, even as American companies shift production or lay off workers amid escalating trade battles.

The president hosted Harley executive at the White House in 2017 and has repeatedly praised the company as a strong homegrown product. But since then the company has been counting the costs of his trade policy.

Trump vowed to make the iconic motorcycle maker great again when he took office a year ago.

"The ultimate goal, if we could get there, is no tariffs or if anything few tariffs on anything", said Walker, a Republican.

For motorcycles, the European Union raised its 6% tariff to 31%.

Instead, it will eat $30 million to $45 million for the rest of this year and $90 to $100 million annually. Seemingly, this has left Harley-Davidson little option but to shift production elsewhere.

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The American company Harley-Davidson will move the production of some motorcycles out of the United States to avoid rising costs from tariffs.

United Steelworkers, a labor union representing some of the motorcycle maker's USA employees, said Monday that Harley-Davidson had long since begun to shift its manufacturing operations overseas.

Motorcycles were hit with a whopping 31 percent tariff, a penalty that amounted a 25 percent increase in costs.

In order to offset the impact of retaliatory European Union tariffs, Harley-Davidson said it would be shifting some production overseas, but didn't specify where.

Despite Trump's assertion that "trade wars are good, and easy to win", however, Harley isn't so impressed.

Harley-Davidson said it expected the ramp-up in production to take nine to 18 months.

Meanwhile, Trump is threatening to slap 20% tariffs on US auto imports from Germany and the rest of Europe, which would dramatically escalate the conflict. The tactic is meant to give USA factories producing those raw materials a better chance, because they'll be competing against importers who now have additional tariff costs.

Retaliation by Brussels targeted producers in Republican states where Trump draws much of his support - including bourbon whiskey, Levi's jeans - and is expected to raise the prices of USA goods worth up to €2.8bn (£2.5bn). Moreover, the European Union is highly unlikely to pursue Harley Davidson specifically.

Passing along that cost to consumers would have "an immediate and lasting detrimental impact" to Harley-Davidson's sales in Europe.

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