Harley-Davidson move shows United States facing 'consequences' of tariffs: European Union

Marcus Newton
June 28, 2018

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

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"Surprised that Harley-Davidson, of all companies, would be the first to wave the White Flag", he said. "No, it's not surprising at all", said Scott Lincicome, an worldwide trade attorney and an adjunct scholar at the Cato Institute who has been critical of Trump's approach.

Europe implemented tariffs on the imports of U.S. goods, including motorbikes and bourbon, in response to Donald Trump's tariffs on steel and aluminium.

They have drawn retaliation from the EU, Canada, Mexico, India and others while driving up the cost of metals for manufacturers in the US.

Asked about the Harley decision, Wisconsin Governor Scott Walker addressed the issue of tariffs in general but not specifically the situation faced by the company.

The US and China are also volleying back and forth over tariffs. At a presidential debate that year, the motorcycle-boot wearing Walker said his Secret Service nickname as president would be "Harley".

"Back in the 19th century, trade taxes sort of worked". This percent increase adds almost $2,200 to the cost of an average motorcycle, according to the public filing. "Their employees and customers are already very angry at them", he wrote on Twitter.

As my colleague Rick Newman has written previously, from the outset Trump's actions on trade this year have implicitly chosen which industries and companies would be winners and which would be losers.

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"EU tariffs on Harley-Davidson motorcycles exported from the U.S. have increased from 6 percent to 31 percent", Harley-Davidson said in its filing with the U.S. Securities and Exchange Commission. Harley-Davidson's preference is to manufacture within the US, but believed shifting some production "was its only sustainable choice to continue serving the EU", Wedbush's Hardiman wrote.

Media captionHow hogs and Harleys became weapons in a looming trade war.

In recent years, it opened plants in Brazil and India.

"Harley Davidson made the decision earlier this year to move jobs to Thailand before the tariffs were even announced", said a statement from Renacci.

Harley-Davidson bikes are lined up at a bike fair in Hamburg, Germany, February 24, 2017.

But just over a year later, Harley serves as a sobering example of what happens when Trump's America First trade policy collides with the rest of the world. The E.U. tariffs appear to be a direct response to the tariffs imposed by the Trump administration on European steel and aluminum.

In addition to being a possible economic harbinger, the loss of Harley-Davidson's production also comes as a symbolic blow to Trump.

Harley announced the Thailand factory after Mr. Trump's withdrawal from the Trans-Pacific Partnership. The E.U. Friday instituted almost $3.3 billion worth of taxes on imports from the United States, including Harley-Davidson motorcycles, in response to the Trump administration's 25 and 10 percent tariffs on steel and aluminum, respectively, imposed in late May.

Last fall, Ryan traveled to Harley-Davidson headquarters in his home state to tout how the Milwaukee-based motorcycle maker and other companies would experience lower taxes from the historic GOP tax-cuts law. Since it doesn't want that, it chose to move production of motorcycles for European Union destinations from the U.S. to its global facilities.

Other reports by MaliBehiribAe

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