Harley-Davidson to shift some production overseas

President Donald Trump and Vice President Mike Pence walk together on their way to greet Harley Davidson executives on the South Lawn of the White House

Harley-Davidson announced today that it is shifting more production overseas to avoid getting caught in President Donald Trump's trade war with the European Union.

"To address the substantial cost of this tariff burden long-term, Harley-Davidson will be implementing a plan to shift production of motorcycles for European Union destinations from the U.S.to its worldwide facilities to avoid the tariff burden".

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

The company sold about 40,000 new motorbikes past year in Europe, equivalent to a sixth of its worldwide sales, making the region its most important market after its home country.

Harley-Davidson now has overseas manufacturing plants in Brazil, India and Australia and is building a plant in Thailand.

The EU's decision to raise tariffs on United States motorcycle imports from 6 percent to 31 percent was seen as an attack on Harley-Davidson.

The story of William Harley and Arthur Davidson's brainchild turning into one of the most well-known motorcycle companies is a quintessential example of the American dream. But since then the company has been counting the costs of his trade policies.

Mr Trump said he has fought hard for the company and was surprised by its plans, which he described as waving the "White Flag".

"Motorcycles" don't even merit a mention in the Indian Ministry of Commerce and Industry's data on exports to the United States, as The Post's Annie Gowen wrote in February, so the tariffs Trump has threatened to impose would essentially have nearly zero impact. In a piece by the Washington Post, the Mid-Continental nail, one of the country's largest manufacturers of nails, say they will be laying off approximately 60 employees as a direct result of the European Union tariffs set forth by the Trump administration. Seemingly, this has left Harley-Davidson little option but to shift production elsewhere.

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It's a move that runs counter to the narrative of Harleys as a quintessentially patriotic mode of transportation-a real bike for real Americans-that the company has cultivated for decades with taglines like "Until you've been on a Harley-Davidson, you haven't been on a motorcycle".

Already, Harley had announced plans to close a factory in Missouri and build one in Thailand, after Trump pulled the U.S. out of the Trans-Pacific Partnership, the free-trade agreement with a bloc of Asian countries including New Zealand that would have lowered barriers to key markets.

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.

Shares in Harley-Davidson were down by 4.1 percent to $42.38 (£31.92) shortly after the market opened. The company maintains facilities in Brazil, India and Thailand where it completes assembly of motorcycles for sales in those and other markets. A White House spokeswoman did not immediately respond to a request for clarification.

Harley-Davidson said it will not raise its prices due to "an immediate and lasting detrimental impact to its business in the region", according to The Associated Press.

Harley-Davidson said it expected the ramp-up in production to take nine to 18 months.

However, the tariffs have also helped to spur investment in United States steel plants.

European Commission Vice President Jyrki Katainen said unilateral action by Trump in disputes over steel, China's technology policy and other issues highlighted the need to modernize the World Trade Organization to reflect developments in the world economy.

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