Trump's Tariffs Are Forcing Harley-Davidson To Move Jobs Overseas

US trade policy drives Harley Davidson to create EU jobs

US trade policy drives Harley Davidson to create EU jobs

The company in its US Securities and Exchange Commission (SEC) filing on Monday said that new retaliatory tariffs by the European Union (an increase from six percent to 31 per cent) will result in an incremental cost of approximately Dollars 2,200 on an average motorcycle exported from the US to the EU.

Correction: Harley-Davidson said it will be moving production to its global factories, not necessarily to factories in Europe.

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. The company already has plants in Australia, Brazil and India, and it will soon open another facility in Thailand.

Harley shares have lost about 6% since early March when the trade skirmish between the United States and the European Union started, and are down over 15% since end-December 2017. Alden said. "This will pose a real challenge to the president's core claim that his policies will lead companies to build more things in the U.S". These EU tariffs came in retaliation for steep tariffs that the Trump administration has imposed on the EU. It estimates the cost for the rest of this year to be from $30 million to $45 million. The U.S. had a $14.7 billion energy surplus with Mexico in 2017, for instance, because it exports refined petroleum products - taking lower-value crude oil made in the U.S. or Mexico and turning it into more valuable products for sale at home and overseas.

Harley-Davidson's warning is a huge blow for the Republican President, who says he is safeguarding jobs in the US's industrial hotspots.

Amid the early fallout of the mounting trade war, Trump took to Twitter, saying he was "surprised" about Harley Davidson's move and assuring the company it would not "ultimately" pay European Union tariffs, without clarifying how that would happen.

Sen. Jeff Flake (R-Ariz.), for example, warned over the weekend that he's prepared to oppose Trump's judicial nominees unless the Senate votes on legislation curtailing the president's power to unilaterally impose tariffs on other countries. Its products imported to Europe originally faced a 6 percent tax, but that number has since risen to 31 percent.

Harley-Davidson's stock, and the Dow Jones as a whole, dipped Monday morning as trade-war fears mounted.

Harley-Davidson said tariffs would reduce customer access to its motorcycles and hurt the dealers' businesses.

The action comes in response to tariffs the European Union imposed on US -made motorcycles.

Harley plans to absorb much of the cost increase tied to the EU's tariffs because passing it on to dealers or customers would make an "immediate and lasting detrimental impact" on its business, it said in the filing.

Donald Trump is no longer a fan of Harley Davidson, according to his always-active Twitter.

A spokeswoman for House Speaker Paul Ryan, of Wisconsin, says Harley's decision is "further proof of the harm from unilateral tariffs". A year after Trump pulled the USA out of a 12-nation trade deal, the Trans-Pacific Partnership, in January 2017, Harley announced it would close its factory in Kansas City, Missouri, and consolidate production in York, Pennsylvania, eliminating about 260 jobs.

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