Harley, stung by tariffs, shifts some production overseas

Walker says the issue was discussed at a U.S. Department of Commerce meeting he attended in Washington last week where he pitched companies on investing in Wisconsin.

In a filing to their investors, Harley-Davidson have announced that they plan to shift production of some of the models out of the United States to avoid the new European Union import tariffs.

The EU's tariffs retaliating against Trump's steel and aluminum levies will cost Harley about $2,200 per bike shipped to Europe, according to a Monday filing.

The Associated Press reports that while President Donald Trump is pointing to Harley as a prime example of an American business as those hurt by trade barriers, the bike maker has regularly warned against imposing tariffs. While the company said it's committed to making motorcycles in the USA, it suggested it has no other choice but to move production from its home market.

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. That increase will add on average $2,200 to the cost of each motorcycle sold in the European Union, and would cost the company $90 million to $100 million a year, the filing said.

The Milwaukee company plans to make motorcycles destined for Europe in factories on the Continent, it said in a regulatory filing.

Europe is too important of a market for Harley to neglect.

Harley-Davidson will not raise its prices to avert "an immediate and lasting detrimental impact" on sales in Europe, it said. It anticipates the cost for the rest of the year to be approximately $30 million to $45 million.

Harley said ramping-up production at its overseas worldwide plants will require incremental investments and could take at least nine to 18 months. The company's US factories are in York, Pa.; Kansas City, Mo., and Menomonee Falls, Wis. US motorcycle sales peaked at more than 1.1 million in 2005 but then plummeted during the recession. The company already has plants in Australia, Brazil and India, and it will soon open another facility in Thailand. Such risks and uncertainties include the following, among other factors: (i) uncertainties regarding the quantity and mix of motorcycles that the company exports from the US during the periods in question; (ii) uncertainties regarding the import prices of motorcycles; (iii) whether the European Union tariffs apply to shipments that had already commenced at the effective time of the tariffs; (iv) uncertain timing associated with shifting production from the U.S.to worldwide facilities; and (v) uncertainties regarding the size and duration of European Union tariffs.

"We are now assessing the potential impact on our USA facilities", Michael Pflughoeft, a company spokesman, said in an email.

The Wall Street Journal reported that the Trump administration plans to impose curbs on Chinese investment in American technology companies and high-tech exports to China.

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