Harley-Davidson moving some production out of US in response to tariff war
In response to the European Union (EU) and their retaliatory tariffs aimed at American exports and products, Harley-Davidson Motor Company has decided to shift “some of its production” outside of the United States.
By moving the production of motorcycles from America to somewhere in Europe (or basically anywhere that isn't America), Harley-Davidson will effectively avoid the tariffs imposed on their US-to-EU deliveries, while also costing the US several jobs along the way, potentially, according to CNN Money.
“It's some of the most direct evidence yet that tit-for-tat trade fights between the United States and other countries have consequences for American companies. Harley-Davidson said it stood to lose as much as $100 million a year,” said Nathaniel Meyersohn for CNN.
Because Harley doesn’t want to simply ramp up production to make up for the money lost to the tariffs, the company said that physically moving a production office to avoid the tariffs altogether is “the only sustainable option.”
Last week Friday, the EU “began imposing tariffs … on $3.2 billion worth of American goods.” Some of America’s finest exports were hit, including any orange juice, peanut butter, motorboats, motorcycles, cigarettes and denim. Prior to this retaliation, the US imposed tariffs on Europe’s steel and aluminum exports.
In the motorcycle category alone, the EU increased its tariff to 31% from 6%, which makes each classic motorbike over $2,000 more expensive to deliver.
Harley has said its move “overseas” will not affect motorcycle prices for customers, and that if it were to increase prices for customers and keep all production in the US, the sheer expense of the taxed bikes “would have an immediate and lasting detrimental impact to its business in the [European] region.”
Harley employed 5,800 workers at the end of 2017, and has production plants in Wisconsin, Pennsylvania and Missouri; facilities are also operational in Brazil, India and Australia.
The company has not said if any jobs are at risk, though CNN commenters have been speculating that they may be.
Europe makes up Harley-Davidson’s second largest market behind America itself. Sales in Europe dropped only 0.4% for the bike-maker yet dropped 8.5% in the US from 2016 to 2017.