Trump revs up Harley-Davidson fight into second day

Harley bikes

In late April, Harley said Trump's metal tariffs would inflate its costs by an additional $15 million to $20 million this year on top of already rising raw material prices that it expected at the start of the year.

Trump has regularly pointed to Harley-Davidson as an example of a USA business harmed by trade barriers.

In response to the USA tariffs, the European Union began charging import duties of 25 percent on a range of US products including big motorcycles like Harley's on June 22.

Harley forecast the EU's retaliatory tariffs would cost the company $US90 million ($121 million) to $US100 million ($135 million) a year.

Harley-Davidson shares closed down 0.6 percent at $41.32, after falling almost 6 percent on Monday. US motorcycle sales peaked at more than 1.1 million in 2005 but then plummeted during the recession. Sources said that during his recent exchanges with his U.S. counterparts, India's commerce minister Suresh Prabhu explained that the USA trade deficit would be whittled down in no time considering a growing economy like India would be buying 1000 or more aircraft and huge reserves of energy from the United States., not to speak of the growing military purchases. In 2017, Harley-Davidson sold approximately 40,000 motorcycles in the European Union, representing 16% of its total sales.

Harley-Davidson did not respond to requests for comment for this story. He has been riding Harley-Davidson motorcycles, in particular, since October of 1997.

The EU imposed retaliatory tariffs last week on $3.4 billion worth of USA products like bourbon, motorcycles and orange juice.The new duties are in direct response to President Trump's decision to increase fees on aluminium and steel coming from Europe.

It makes sense for Harley to reposition its long-term strategy outside the United States: Last quarter, Harley's sales in the United States fell 12%, but they grew 6.8% in Europe, the Middle East, and Africa.

While that echoed the president's sentiment on Twitter, Capra told KCUR he does "not have verification" that jobs or equipment from Kansas City are destined for overseas plants. Mr. Trump tweeted, "Harley-Davidson said they would move much of their plant operations in Kansas City to Thailand". In January, it said it would consolidate its Kansas City, Mo., plant into its York, Pennsylvania, facility. US consumers will do the same when buying products made with imported steel.




But Harley actually started its Thailand factory as a result of another Trump policy - his withdrawal from the Trans-Pacific Partnership.

"A Harley-Davidson should never be built in another country-never!" he wrote on Twitter on Tuesday. Now he is expected to restrict technologies sold to China, and Chinese investment in USA companies. He hasn't spelled out what he would do to further that policy and his spokeswoman repeated that same position Tuesday when asked to react to Trump's tweets. Harley-Davidson's preference is to manufacture within the USA, but believed shifting some production "was its only sustainable choice to continue serving the EU", Wedbush's Hardiman wrote.

But the tariffs probably hastened Harley's exit.

Harley-Davidson also announced it would be raising investments in the new chosen locations.

The company said that it was making the move in response to tariffs from the European Union.

Trump wrote that Harley "must know that they won't be able to sell back into United States without paying a big tax!". "This is not good for the American economy.' And that's what's happening", Malmström told reporters, adding "there has to be consequences if you do not respect worldwide global rules".

Trump's attacks were factually incorrect when he accused Harley-Davidson Inc of using his trade war with the European Union as an excuse to move production overseas. But by Tuesday morning, he was in a more vengeful mood.

Harley-Davidson is struggling with big issues in its home market.

In recent years, it opened plants in Brazil and India. Changing demographics like aging baby boomers are to blame, but Harley-Davidson also has failed to attract younger consumers. For that very good reason, Harley built a plant in India to produce motorcycles for the Indian market. Still, Harley has said previously that a long-term goal is to expand its worldwide business and that it faces excess capacity in the USA, where sales of the iconic American brand have declined as its core market has aged.

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