The European Union recently hit the United States with retaliatory tariffs on goods worth approximately $3.2 (€2.8) billion. Among the items subject to a new 25 percent tariff are orange juice, whisky and motorcycles.
According to CNBC, Harley-Davidson revealed it was planning to get around the tariffs by shifting some production overseas. This would effectively allow the company to import motorcycles into Europe without having to face an overall tariff of 31 percent.
The company noted this would have raised the cost of motorcycles built in the United States and imported into Europe by approximately $2,200 (€1,888) each.
Early this year Harley-Davidson said they would move much of their plant operations in Kansas City to Thailand. That was long before Tariffs were announced. Hence, they were just using Tariffs/Trade War as an excuse. Shows how unbalanced & unfair trade is, but we will fix it…..
— Donald J. Trump (@realDonaldTrump) June 26, 2018
Despite being a sound business move, President Trump attacked the company in a series of tweets which accused Harley-Davidson of “using tariffs/trade war as an excuse” to move production overseas. Trump went on to say “When I had Harley-Davidson officials over to the White House, I chided them about tariffs in other countries, like India, being too high. Companies are now coming back to America. Harley must know that they won’t be able to sell back into U.S. without paying a big tax!”
The latter tweet seems to suggest the president doesn’t understand the situation as Harley-Davidson was only planning to shift some production overseas to get around the new European tariffs. This isn’t the first time it has happened as he previously claimed Jeep was moving all production to China. This earned him a rebuke from FCA styling guru Ralph Gilles who said “you are full of shit!”
Obama is a terrible negotiator. He bails out Chrysler and now Chrysler wants to send all Jeep manufacturing to China–and will!
— Donald J. Trump (@realDonaldTrump) November 1, 2012
Trump continued his tweetstorm by saying “A Harley-Davidson should never be built in another country – never!” The president then claimed employees and customers are already angry at the company and moving production overseas would be the beginning of the end for Harley-Davidson. Trump then threatened the company “will be taxed like never before” if they follow through with the move.
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!
— Donald J. Trump (@realDonaldTrump) June 26, 2018
The tweetstorm comes one day after the president said he was “Surprised that Harley-Davidson, of all companies, would be the first to wave the white flag.” He went on to say he “fought hard for them and ultimately they will not pay tariffs selling into the E.U.”
While it will take some time to shift production overseas, the BBC reports Harley-Davidson won’t pass the increased costs onto consumers as it doesn’t want to jeopardize sales. The company sold 39,773 motorcycles in Europe last year and if they didn’t shift production, they would lose $45 (€38.6) million this year due to the increased tariffs.
While a number of people have expressed anger at both parties, it’s worth mentioning the increased tariffs are a direct result of Trump’s decision to hit the European Union with new steel and aluminum tariffs.
