Economy

Harley-Davidson to move some jobs out of U.S. to avoid tariffs

Harley-Davidson to move some jobs out of U.S. to avoid tariffs

But Trump appears to believe Harley-Davidson will manufacture products for the US market overseas, which it so far has not indicated it plans to do with this move.

The company sold almost 40,000 motorcycles in the Europe Union previous year, with sales second only to those in the U.S. "Their employees and customers are already very angry at them", Mr. Trump wrote in a series of tweets Tuesday morning.

Fox Business Network's Charles Payne said Tuesday he believes Harley-Davidson is using the Trump administration's tariffs as "cover" for moving production overseas.

"I fought hard for them and ultimately they will not pay tariffs selling into the European Union, which has hurt us badly on trade, down $151billion".

The EU's tariff on motorcycles spiked sharply from 6% to 31%, with Harley-Davidson predicting a cost increase of approximately $2,200 per motorcycle exported from the U.S.to the EU.

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

"When I had Harley-Davidson officials over to the White House, I chided them about tariffs in other countries, like India, being too high". Trump praised Harley-Davidson as an "American icon, one of the greats" and expressed confidence the company would expand U.S. manufacturing under his administration. Instead of talking about Harley on Tuesday, Walker tried to shift the focus to Foxconn, tweeting: "Foxconn's state-of-the-art products will be made in the U.S.A. - proudly in the state of Wisconsin!"

Harley-Davidson announced it will move some production of European motorcycles to the EU to avoid tariffs.

The move is among the first signs that Trump's use of tariffs, which he has promoted as a way to boost employment in the steel and aluminum industries, is hurting other American businesses. "Taxes just a Harley excuse - be patient!" Harley-Davidson's preference is to manufacture within the USA, but believed shifting some production "was its only sustainable choice to continue serving the EU", Wedbush's Hardiman wrote.

More news: U.S. 'still working' to reunite 2000 illegal migrant kids with families

In January, Harley-Davidson announced plans to close its Kansas City plant. The company said the shift will require additional investment and could take nine to 18 months to complete.

President Donald Trump speaks during a meeting with King Abdullah II of Jordan in the Oval Office of the White House, Monday, June 25, 2018, in Washington. Yet, Harley has warned consistently against tariffs, saying they would negatively impact sales. According to Thomson Reuters, the European Union tariffs reduced Harley-Davidson's 2018 profit by 5-8 percent.

In fact, Trump has tried to threaten numerous countries with tariffs if they don't reduce tariffs and other trade barriers, but so far most of those discussions have ended in acrimony and frustration.

Trump is correct that Harley-Davidson being an American-made motorcycle is a significant part of the brand's appeal here. These ripple effects are important to keep in mind as Trump turns his attention to barring Chinese investments in the USA and countering the country's efforts to bolster its own industrial prowess, often on the back of American technology.

The company is only the latest targeted by Trump for various reasons.

Jared Bernstein, a top economic adviser to Joe Biden when he was vice president, said Trump's tariffs reveal a lack of understanding of the modern global economy, which has both mobile capital and mobile production capacity. That makes the market second to the US. Shortly after taking office, the Trump administration pulled the USA out of the Trans-Pacific Partnership, a 2016 agreement made among 12 North American and Asian countries that lowered barriers to trade.

Trump added that the administration is finishing a study on imposing tariffs on cars from the EU. "We are hopeful the USA and European Union governments will continue to work together to reach an agreement on trade issues and rescind these tariffs".

Ryan says the US should counter unfair trading practices, but says, "There are better tools than tariff increases".


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