Harley-Davidson said the EU's new tariffs on US-made motorcycles would drive up costs and force the company to shift a sizable portion to its production to Europe.
European officials last week imposed stiff tariffs on a wide range of USA -made goods sold within the European Union.
The shift in production is an unintended outcome of US President Donald Trump's administration imposing tariffs on European steel and aluminium early this month, a move created to protect US jobs.
Each motorcycle will cost an average of $2,200 extra after the European Union raised its tariff on imported USA bikes to 31 percent from 6 percent on June 22, the Milwaukee-based manufacturer said Monday in a regulatory filing. "Most global trade is still in manufacturing, and the combination of the steel and aluminum tariffs, the coming China tariffs, and the various retaliatory actions are going to increase costs for many manufacturers", Alden said. Harley responded with the promise of an electric model, but even that is unlikely to counter the tariff-related increase in sticker price.
"We are now assessing the potential impact on our USA facilities", Michael Pflughoeft, a company spokesman, said in an email. The story of William Harley and Arthur Davidson's brainchild turning into one of the most well-known motorcycle companies is a quintessential example of the American dream.
The EU's tariffs are only the latest blowback Harley has faced from Trump's trade policies.
Harley-Davidson said it plans to bear increased costs to avoid a decrease in sales in the EU.
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Harley-Davidson plans to move some of its motorcycle production outside the U.S. in response to retaliatory tariffs that include its products, Bloomberg reports.
"So thank you, Harley-Davidson, for building things in America", Trump said at the time. In a filing, the company estimated that it will spend up to $100 million each year to keep its price tags flat.
Why did the European Union impose these tariffs?
Walker says that's what he will push for in the wake of news that Harley-Davidson is shifting production of motorcycles headed for Europe from the U.S.to factories overseas due to increasing tariffs. Shifting production to its non-U.S. plants will require additional investment overseas and is expected to take nine to 18 months, Harley said.
The company has assembly plants in the United States, India and Brazil, and will open a new plant in Thailand in the summer.
Passing along that cost to consumers would have "an immediate and lasting detrimental impact" to Harley-Davidson's sales in Europe.
In 2017, Harley sold almost 40,000 new motorcycles in Europe which accounted for more than 16% of the company's sales previous year.
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