Washington: Harley-Davidson plans to shift some motorcycle production away from the US to avoid the “substantial” burden of European Union tariffs. Last week, the EU imposed retaliatory tariffs on US goods, including bourbon, orange juice and motorcycles, BBC reported on Monday. The measures are a response to new US duties on steel and aluminium imports.
Wisconsin-based Harley-Davidson said the increased cost from the tariffs threaten its international sales, which it has been trying to expand. The company has assembly plants in Australia, Brazil, India and Thailand as well as in the US. It said it would raise investment in its international plants, though it did not say which ones.
“To address the substantial cost of this tariff burden long-term, Harley-Davidson will be implementing a plan to shift production of motorcycles for EU destinations from the US to its international facilities to avoid the tariff burden,” the company said.
Harley-Davidson said it expected the ramp-up in production to take nine to 18 months. US President Donald Trump tweeted his disappointment at Harvey-Davidson’s decision which he characterised as the company waving the white flag of defeat.
The company’s move is one of the most visible consequences of the trade disputes triggered by Trump’s decision to levy tariffs on steel and aluminium imports. Trump says the duties are necessary to protect the US steel and aluminium industries, which are vital to national security.
They have drawn retaliation from the EU, Canada, Mexico, India and others while driving up the cost of metals for manufacturers in the US. US companies that range from boat-builders to nail manufacturers have warned about the consequences of escalating trade tensions. However, the tariffs have also helped to spur investment in US steel plants.
For example, British-owned GFG Alliance, has said it plans to invest $5 billion over several years to reopen a shuttered steel plant in South Carolina. The firm says the move will put about 125 people back to work “immediately”.