Economy

Harley-Davidson planning to move some production out of USA

Harley-Davidson planning to move some production out of USA”

Trump says in tweets Tuesday that the company had already announced it was closing a Kansas City plant. "In 2017, almost 40,000 riders bought new Harley-Davidson motorcycles in Europe, and the revenue generated from the European Union countries is second only to the U.S.".

The company, which sold almost 40,000 motorcycles in Europe previous year, said it planned to absorb those costs rather than pass them on to customers and risk damaging sales.

The president said the move "will be the beginning of the end" for the company and threatened that "they will be taxed like never before!". "Harley must know that they won't be able to sell back into US without paying a big tax!"

President Donald Trump has a strong message for Milwaukee-based motorcycle manufacturer Harley Davidson if the company follows through on plans to move some production overseas.

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

European Union tariffs will add $2,200 to the cost of an average motorcycle, Harley-Davidson said in a Securities and Exchange Commission filing.

The Wall Street Journal newspaper reports that the Trump administration plans to limit Chinese investment in American technology companies and high-tech exports to China. Multinationals that expand overseas, such as Harley, typically add jobs to their USA operations, he said.

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

In one Tuesday tweet, Trump suggested that Harley was motivated by a hidden agenda, writing: "Harley must know that they won't be able to sell back into the USA without paying a big tax!"

On NPR, Joe Capra of the International Association of Machinists & Aerospace Workers Local 176, said he believes Harley-Davidson is using the tariff issue as an excuse for to do what they long planned to do. "Hence, they were just using Tariffs/Trade War as an excuse", Trump said on Twitter.

For motorcycles, the European bloc raised its 6% tariff to 31%.

In a series of tweets Tuesday morning, Trump said Harley is using the European retaliatory tariffs as "an excuse" for moving manufacturing overseas. In addition to four US-based manufacturing facilities, Harley operates plants in Australia, India, Brazil, and Thailand.

Apart from being an American brand, Harley-Davidson is also a favorite of Trump's.

Trump's Twitter account has, in fact, been filled with posts on this matter.

"This is a piece of a larger discussion on trade and tariffs - this is a byproduct of a trade war, and there are few winners in this", Schreiber said.

Alden said that given those two compelling economic cases, Harley-Davidson could be just the start of a series of manufacturing relocations outside the US. "We will now wait for the USA decision on the auto tariffs", an official in Germany's economy ministry said.

"I don't think he's a bike guy".

His aggrieved tweetstorm - echoed in subsequent comments at the White House - made it clear that he took Harley's action personally. The company still makes most of its motorcycles at plants in Pennsylvania and Wisconsin. But if you ask Harley-Davidson, there's no connection between Kansas City and Thailand. "The best way to help American workers, consumers, and manufacturers is to open new markets for them, not to raise barriers to our own market".



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