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Harley-Davidson shifting some production out of U.S.

Harley-Davidson will shift some production out of the United States to address the “substantial cost” of retaliatory EU tariffs imposed June 22 in response to global U.S. tariffs on steel and aluminum that hit the EU June 1, the motorcycle company said in a public filing on Monday 25 June 2018. 

   “Harley-Davidson will be implementing a plan to shift production of motorcycles for EU destinations from the U.S. to its international facilities to avoid the tariff burden,” the company said. “Harley-Davidson expects ramping up production in international plants will require incremental investment and could take at least nine to 18 months to be fully complete.”  

 President Donald Trump unleashed a barrage of tweets on Monday and Tuesday criticizing Harley-Davidson’s decision.   
   “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 said in another Tuesday tweet. “Companies are now coming back to America. Harley must know that they won’t be able to sell back into the U.S. without paying a big tax!”.
   In yet another Tuesday tweet, Trump suggested Harley moving operations to another country would hurt its “aura” as well as ultimately lead the company to pay even higher tariffs.
   He said, “A Harley-Davidson should never be built in another country-never! Their employees and customers are already very angry at them. If they move, watch, it will be the beginning of the end — they surrendered, they quit! The Aura will be gone and they will be taxed like never before!” 

In his first speech before a joint session of Congress on Feb 28, Trump said that he was working to defend the company from the impact of high foreign taxes. He said, “I believe strongly in free trade, but it also has to be fair trade. It’s been a long time since we had fair trade.”    
   The firm estimates the yearly aggregate impact of the EU tariffs to be approximately $90 million to $100 million, according to the filing. 

  “Increasing international production to alleviate the EU tariff burden is not the company’s preference, but represents the only sustainable option to make its motorcycles accessible to customers in the EU and maintain a viable business in Europe,” the filing says. “The company remains fully engaged with government officials in both the U.S. and the EU helping to find sustainable solutions to trade issues and rescind all tariffs that restrict free and fair trade.”

 

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