Updated
Photo:
The Harley-Davidson has long been seen as the iconic American motorbike. (Reuters: Fabian Bimmer)
US President Donald Trump has taken aim at
Harley-Davidson after the motorcycle maker said it would begin to shift
the production of motorcycles headed for Europe overseas as it faces
spiralling costs from European Union tariffs.
Key points:
- Harley says tariffs will cost company up to $135m a year
- Company says shifting production overseas could take 18 months
- Trump urges Harley to remain patient
"Surprised that Harley-Davidson, of all companies, would be the first to wave the White Flag," Mr Trump wrote on Twitter.
"I fought hard for them and ultimately they will not pay tariffs selling into the EU.
"Taxes just a Harley excuse — be patient!"
Mr Trump vowed to make the iconic motorcycle maker great again when he took office last year, meeting company executives at the White House and thanking them, "for building things in America".
But since then the company has been counting the costs of his trade policy.
Harley has warned consistently against tariffs, saying they would negatively impact sales.
The European Union on Friday began rolling out tariffs on American imports like bourbon, peanut butter and orange juice.
The EU tariffs on $US3.4 billion ($4.6 billion) worth of US products are retaliation for duties the Trump administration is imposing on European steel and aluminium.
Harley forecast the EU's retaliatory tariffs would cost the company $US90 million ($121 million) to $US100 million ($135 million) a year.
Photo: Donald Trump met with Harley-Davidson's chief last year in February. (Reuters: Carlos Barria)
Harley-Davidson sold almost 40,000 motorcycles in the European Union last year, generating revenue second only to the US sales, according to the Milwaukee-based company.
The maker of the iconic American motorcycle said in a regulatory filing on Monday that EU tariffs on its motorcycles exported from the US jumped between 6 per cent and 31 per cent, which translates into an additional, incremental cost of about $US2,200 ($3,000) per average motorcycle exported from the US to the EU.
"Harley-Davidson maintains a strong commitment to US-based manufacturing which is valued by riders globally," the company said in prepared remarks."Increasing international production to alleviate the EU tariff burden is not the company's preference, but represents the only sustainable option to make its motorcycles accessible to customers in the EU and maintain a viable business in Europe.
"Europe is a critical market for Harley-Davidson."
Photo: Harley Davidson said it could take up to 18 months to shift production overseas. (AP: Keith Srakocic)
Harley-Davidson will not raise its prices to avert "an immediate and lasting detrimental impact" on sales in Europe, it said.
It will instead absorb a significant amount of the cost in the near term.
Harley-Davidson said that shifting targeted production from the US to international facilities could take up to 18 months to be completed.
The company is already struggling with falling sales.
In January, it said it would consolidate its Kansas City, Missouri, plant into its York, Pennsylvania, facility.
US motorcycle sales peaked at more than 1.1 million in 2005 but then plummeted during the recession.
Asked about the Harley decision, Wisconsin Governor Scott Walker addressed the issue of tariffs in general but not specifically the situation faced by the company.
"The ultimate goal, if we could get there, is no tariffs or if anything few tariffs on anything," said Mr Walker, a Republican.
"That's what I'm going to push for, ways that we can get to a level playing field then we don't have this tit for tat on any number of products out there."
AP/Reuters
No comments:
Post a Comment