Harley said ramping up production at overseas worldwide plants could take at least nine to 18 months. While Harley said it's committed to making motorcycles in the U.S., it suggested it had no other choice but to move production from its home market. In addition to four US-based manufacturing facilities, Harley operates plants in Australia, India, Brazil, and Thailand.
The Associated Press reports that while President Donald Trump is pointing to Harley as a prime example of an American business as those hurt by trade barriers, the bike maker has regularly warned against imposing tariffs.
Either way, Harley-Davidson's announcement drew criticism from the White House. The group will examine technology policy, government assistance to businesses and other issues in order to guarantee support for global trade.
The move conflicts with the Trump administration's touting of the U.S. economy's strength. While Trump is now under significant pressure to relent on such imposed tariffs, it's likely the calls for a reversal will only raise in volume and in number, in the wake of quantifiable job losses linked directly to the president's trade strategies.
"On a full-year basis, the company estimates the aggregate annual impact due to the European Union tariffs to be approximately $90 to $100m".
Harley-Davidson plans to shift some motorcycle production away from the U.S. to avoid the "substantial" burden of European Union tariffs.
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Harley shares fell as much as 4.2 per cent and were down 4 per cent to US$42.45 as of 10:35 a.m.in NY.
Motorcycles were hit with a whopping 31 percent tariff, a penalty that amounted a 25 percent increase in costs. USA companies that make higher-value goods like motorcycles are now getting hit by export tariffs on their products and import tariffs on their raw goods.
The statement seemed to suggest that the president expects to negotiate a resolution of his complaints about EU trade practices, which he blames for the $151 billion US merchandise trade deficit with its European allies. He has events that day in Milwaukee, where Harley-Davidson has its headquarters, and Mount Pleasant.
Harley-Davidson did not immediately return a request for comment.
It remains to be seen whether Harley-Davidson's decision to shift some manufacturing operations overseas will force layoffs at its American plants in Missouri, Pennsylvania, and Wisconsin.
A week ago, a 25 percent tariff on steel and a 10 percent tariff on aluminum affecting trade partners Canada, Mexico and the European Union, was implemented by the Trump administration.
The EU, like Canada, Mexico and China all are aiming retaliatory tariffs at targets aimed to weaken Trump and the GOP in key political battlegrounds.
The company said that it will not raise its prices because that would cause an immediate and long-lasting effect on sales in Europe.