The iconic American motorcycle maker’s decision to increase overseas production has drawn the wrath of US President Donald Trump, who accused Harley-Davidson of surrendering before his trade war could even start.
“Surprised that Harley-Davidson, of all companies, would be the first to wave the White Flag. I fought hard for them and ultimately they will not pay tariffs selling into the EU, which has hurt us badly on trade, down $151 Billion. Taxes just a Harley excuse – be patient!” Trump tweeted on Monday afternoon.
Surprised that Harley-Davidson, of all companies, would be the first to wave the White Flag. I fought hard for them and ultimately they will not pay tariffs selling into the E.U., which has hurt us badly on trade, down $151 Billion. Taxes just a Harley excuse – be patient! #MAGA
— Donald J. Trump (@realDonaldTrump) June 25, 2018
Earlier in the day, multiple media outlets reported that Harley-Davidson was increasing the production of its motorcycles at overseas factories as a response to EU tariffs. Harleys were among the select US exports the EU chose to slap tariffs on earlier this month, after the Trump administration implemented tariffs on aluminum and steel.
EU tariffs will add $2,200 to the cost of an average motorcycle, Harley-Davidson said in a Securities and Exchange Commission filing. Tariffs will add $30-45 million to the company’s expenses this year, amounting to “an immediate and lasting detrimental impact” to its business.
“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 available to customers in the EU and maintain a viable business in Europe,” the company said.
Harley sold 40,000 motorbikes in Europe last year, its second-largest market after the US. Setting up production facilities overseas will take between nine and 18 months, the company said.
The International Association of Machinists and Aerospace Workers (IAM), the union that represents Harley employees in three US plants, said the offshore move had been planned long in advance.
“Harley-Davidson’s announcement today is the latest slap in the face to the loyal, highly-skilled workforce that made Harley an iconic American brand,” IAM president Robert Martinez said in a statement, adding that the decision to close down the Kansas City, Missouri plant was made before the EU announced its tariffs.
In February, Harley-Davidson announced the recall of 251,000 motorcycles due to possible brake failures, a move estimated to have cost the company $25 million.