International

Trump ups attack on Harley-Davidson over move

Harley-Davidson announced it will shift production of some of its bikes overseas in order to avoid retaliatory tariffs by the European Union.

WASHINGTON: U.S. President Donald Trump Tuesday threatened motorcycle maker Harley-Davidson Inc. with higher taxes and said their firm would suffer in a public backlash over its decision to move production for European customers overseas. “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!” Trump said.

“Harley must know that they won’t be able to sell back into U.S. without paying a big tax!”

It was unclear what taxes Trump was referring to, and why the company might have to pay them since it intends to maintain production in the United States as well.

Harley-Davidson said Monday it will move production of motorcycles shipped to the EU from the United States to its international facilities and forecast the trading bloc’s tariffs would cost the company $90 million to $100 million a year.

The president, in a series of Twitter posts that reflected his anger over the decision, also suggested the iconic American brand was using trade tensions over tariffs as an excuse to move production.

“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,” Trump said on Twitter.

Harley-Davidson representatives did not immediately return a request for comment Tuesday.

Harley shares fell nearly 1 percent to $41.24 in early trading.

The Milwaukee-based company decided to build the Thailand plant last year after Trump pulled out from the Trans-Pacific Partnership, which would have lowered import tariffs on its bikes in some of the fastest-growing motorcycle markets in Asia.

In January, the company said it would close a plant in Kansas City, Missouri, due to a sharp drop in motorcycle shipments. But, contrary to Trump’s tweet, it did not say at the time it was moving the operation to Thailand.

Harley said ramping up production overseas could take at least nine to 18 months. It has three assembly plants outside the U.S. – one each in Brazil, India and Thailand.

Trump’s administration imposed tariffs on imports of European steel and aluminum earlier this month. In response, the EU began charging import duties of 25 percent on a range of U.S. products including big motorcycles like Harley’s on June 22.

Trump first responded angrily to the Harley announcement Monday, saying: “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!” Trump said in a post on Twitter Monday night.

Trump has a history with American bikers that might prompt him to take personal umbrage at the move.

During his 2016 presidential campaign, Trump paid tribute to his motorcycle-riding followers and “Bikers for Trump” was formed to show their loyalty.

He invited Harley-Davidson representatives to the White House in February 2017 shortly after he took office, greeting them with “Made in America, Harley-Davidson.”

“Bikers for Trump were like unbelievable. They were with me all the way,” he said.

Harley, the dominant player in the heavyweight U.S. motorcycle market, said it will not pass on any retail or wholesale price increases in the EU and instead focus on shifting some U.S. production.

Harley has been aiming to boost overseas sales of its motorcycles to 50 percent of annual volume from about 43 percent.

In 2017, Harley sold nearly 40,000 new motorcycles in Europe, accounting for more than 16 percent of sales. Revenues from EU countries were second only to the U.S.

 
A version of this article appeared in the print edition of The Daily Star on June 27, 2018, on page 5.

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