Harley-Davidson to shift motorbike production overseas over European Union tariffs

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The EU targeted the American motorcycles as part of its rebuttal to President Donald Trump's tariffs on imported aluminum and steel, one aspect of his multi-front trade war. Wisconsin is the home of Harley Davidson.

Last week the European Union imposed tariffs on USA goods including bourbon whiskey, orange juice and motorcycles. The new 31% import tariffs came into effect on June 22 and were imposed by the European Union as a response to the steel and aluminium tariffs brought by the American government.

Harley-Davidson said the EU's tariffs would add, on average, $2,200 (£1,660) to each bike exported to Europe from the USA as the import tax increases from 6% to 31%.

Mid-Continent Nail imports from Mexico most of the metal wire it uses to make nails. The Milwaukee-based company reports that the full-year effect from the tariffs will have an impact of $90 to $100 million.

Harley-Davidson said that shifting targeted production from the United States to global facilities could take at least nine to 18 months to be completed. The company already has plants in Australia, Brazil and India, and it will soon open another facility in Thailand.

Harley-Davidson Inc. sold nearly 40,000 motorcycles in the European Union previous year, generating revenue second only to the United States, according to the Milwaukee company.

In January, Harley-Davidson announced that it would be closing its plant in Kansas City and moving leftover production to York, Pennsylvania. In a filing, the company estimated that it will spend up to $100 million each year to keep its price tags flat.

USA president Donald Trump has used Harley-Davidson as an example of a U.S. business that is being harmed by trade barriers.

"Harley-Davidson's announcement today is the latest slap in the face to the loyal, highly-skilled workforce that made Harley an iconic American brand".

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The company did not say where production would be shifted, or how many jobs might be affected, but said the move would take nine to 18 months to complete.

While Trump has repeatedly claimed that the USA can easily win trade wars, victims are starting to pile up at home and overseas. He's said the tariffs he's applying will realign trade imbalances that harm United States workers.

Shares of Harley-Davidson fell 3 percent in pre-market trading Monday.

An employee tends to Harley Davidson Motorcycles at the Boston Harley Davidson dealership in Revere, Massachusetts, USA 25 June 2018.

Mercedes-Benz maker Daimler last week cut its 2018 profit forecast citing growing trade tensions. Now he is expected to restrict technologies sold to China, and Chinese investment in USA companies.

"We are extremely anxious about the consequences of a trade war and are urging the White House to not advance with this plan", Ryan's spokeswoman, AshLee Strong has previously revealed.

The iconic brand said the move was prompted by the financial burden of tariffs levied against United States products.

United Steelworkers, a labor union representing some of the motorcycle maker's USA employees, said Monday that Harley-Davidson had long since begun to shift its manufacturing operations overseas.