Home » Money

Stung by tariffs, Harley shifts some motorcycle production overseas

26 June, 2018, 16:14 | Author: Shawna Walton
  • Harley-Davidson to move production for some motorcycles out of US after EU tariffs

Harley announced Monday that because of the European Union's new tariffs on USA motorcycles -retaliation for Trump's steel and aluminum tariffs - the company was shifting some production to non-US plants.

The maker of the iconic American motorcycle said in a regulatory filing Monday that European Union tariffs on its motorcycles exported from the USA jumped between 6 percent and 31 percent, which translates into an additional, incremental cost of about $2,200 per average motorcycle exported from the U.S.to the EU.

The motorbike maker also forecast that the EU's retaliatory tariffs against USA goods would cost the company $90 million to $100 million a year.

In the meantime, it's planning to increase production in global plants over the next 18 months.

In 2017, Harley sold almost 40,000 new motorcycles in Europe which accounted for more than 16% of the company's sales past year. Besides its USA plants, Harley-Davidson maintains manufacturing facilities in Australia, Brazil, India and Thailand, according to its website.

"Thank you, Harley-Davidson, for building things in America", Trump said at the time.

"The company built its reputation and image by making motorcycles here, and if the company wants to continue to market itself as an iconic American brand both at home and overseas, it needs to focus on USA production", he added.

The move, the US President argued, was to protect American businesses, though many experts thought differently.

Harley's move is an example of what economists say will be a significant long-term problem with the tariffs and represents a black eye for Trump's arguments in favor of the measures.

USA president Donald Trump has used Harley-Davidson as an example of a U.S. business that is being harmed by trade barriers. With the European Union tariffs applied, the average cost of a bike faces an increase of around $2,200, it's calculated.

Mercedes-Benz maker Daimler last week cut its 2018 profit forecast citing growing trade tensions.

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.

Spokesman Michael Pflughoeft told CNN that as of Monday Harley-Davidson was still "assessing the potential impact" on the company's 6,000-plus workforce that is mainly concentrated in Pennsylvania, Missouri and Wisconsin.

Harley-Davidson said it will not raise its prices to avert "an immediate and lasting detrimental impact" on sales in Europe. S. plants will require additional investment overseas and is expected to take nine to 18 months, Harley said. According to Harley Davidson, Europe accounts for around 16 percent of all motorcycle sales.

"On a full-year basis, the company estimates the aggregate annual impact due to the European Union tariffs to be approximately $90m to $100m", it added.

Executives in Harley-Davidson were among the first to visit the White House in February 2017 shortly after Trump took office. Paul Ryan, the Republican speaker of the House of Representatives, hails from Harley's home state of Wisconsin, while Senate Majority Leader Mitch McConnell represents Kentucky, a major maker of bourbon.

Recommended:



Popular

England, Colombia back in action
A win for England would see them head into a final group game against Belgium to determine who finishes top. For an England team that came to the World Cup with reduced expectations, things are setting up nicely.

Djokovic eases into Queen's Club semi-finals
So hopefully I can have many more years, because I truly enjoy playing this sport. "I was just trying to stay mentally in it". But with a 0-10 deficit against Djokovic, including twice in straight sets at Wimbledon , the odds are not in his favour.

Trump calls for deporting illegal immigrants with 'no judges or court cases'
Jeff Flake, R-Ariz., a frequent Trump critic, said the problem was larger than a partisan fight. Trump tweeted Sunday that the USA "cannot allow all of these people to invade our Country".

Trump vows to secure borders, wants meritorious people to come to US
Trump's comments came two days after he signed an executive order to halt the separation of migrant children from their families. Parents who remained locked up struggled to get in touch with children being held in many cases hundreds of miles away.

Japan seals historic win over 10-man Colombia
Osako's gritty determination led to a 73rd-minute header from Keisuke Honda's corner kick that gave Japan three points in Group H. It was the ideal start to their campaign, making Japan the first Asian country to defeat a South American team at a World Cup.

Xhaka and Shaqiri goal celebrations bring Balkan politics to World Cup
If Switzerland lose by one goal and Serbia draw, goals scored becomes the tiebreaker; through two games, the Swiss lead 3-2. Kosovo gained independence from Serbia in 2008, however, Serbia still reject this. "In football you always have emotions".

Buhari speaks on Nigeria's defeat of Iceland in Russian Federation
Nigeria coach Gernot Rohr said he is not under pressure ahead of the match. "The most important thing is the team". Argentina and Iceland both have one point after drawing their opening game in Moscow.

Toxic plant that burns skin, causes blindness spreading in U.S.
According to the Isle of Wight County, Virginia, Facebook page , "Giant Hogweed makes Poison Ivy look like a walk in the park". Compressed soaked in an aluminum acetate mixture that is available at pharmacy provide relief form skin irritation.

Gregg Popovich meets with disgruntled Kawhi Leonard
That's while Popovich told the media to ask Leonard's "group" about his timetable to return from injury. He is eligible to sign a five-year, $219 million supermax extension with San Antonio this summer.

Marijuana Will No Longer Get You Arrested if You Are in Canada
The most controversial aspect of Canada's move has been setting the minimum age for use at 18 or 19, depending on the province. Conservative Party leader Andrew Scheer said that making the drug more accessible will normalize its use, Vox reported.