Trump made fun of Walker for his love of motorcycles during the presidential race.
President Trump said Tuesday he is “doing the right thing” by imposing tariffs on certain foreign imports, despite Harley-Davidson’s announcement that it’s moving some production to Europe to avoid the European Union’s retaliatory tariffs against us -made motorcycles.
“To address the substantial cost of this tariff burden long-term, Harley-Davidson will be implementing a plan to shift production of motorcycles for European Union destinations from the U.S.to its global facilities to avoid the tariff burden”, the company said.
Trump’s tweet, sent Tuesday morning, sends a clear message that his administration plans on penalizing companies that shift production as a result of ongoing trade battles between the US and foreign nations.
“They’re using the cloak, the cover of the tariff dispute, as a way to get some heat off themselves”, said Payne, explaining that unions are upset with the company for closing the plant after saving $25.2 million in one quarter due to the administration’s tax cuts.
John Lowery, a sales manager with Battlefield Harley-Davidson in Straban Township, Adams County, said he isn’t that concerned, since the move involves only production of Harley’s sold overseas. The company already has plants in Australia, Brazil and India, and it will soon open another facility in Thailand. Harley-Davidson’s USA bike revenue dropped 8.5% previous year from 2016, but only fell 0.4% in Europe.
Harley, which sold almost 40,000 motorcycles in Europe past year, said it planned to absorb those costs rather than pass them onto customers and risk hurting sales. “Shows how unbalanced & unfair trade is, but we will fix it”, the president also stated.
Harley-Davidson did not immediately respond to a request for comment Tuesday.
Details of the Harley-Davidson move to Thailand were disclosed in the Bangkok Post 13 months ago.
In January, the company said it was closing a factory in Kansas City, Missouri, and consolidating it into a York assembly plant.
Trump ridiculed the company for building motorcycles overseas.
The president soon returned to the topic of Harley-Davidson, saying that he had “chided” company officials about tariffs in other countries, depicting the company’s decision to move operations as an anomaly while many other businesses return to the U.S.
The increase in overseas production will be to manufacture products for the European market, not for shipment back to the US, according to the filing. “I want Harley to stay in the USA, like it has been”.
Harley announced the Thailand factory after Mr. Trump’s withdrawal from the Trans-Pacific Partnership. Trump also seems to be unaware that Harley Davidson’s entry into India was part of a mangoes-for-motorcycles deal between George Bush and Manmohan Singh, premised on Washington allowing important of Indian mangoes to the U.S., a trade that has been mired in bureaucratic red tape.
A current advert for a Harley-Davidson bike in Bangkok.
It was a stark contrast from February 2017, when Harley-Davidson executives visited Trump at the White House, even participating in a photo-op with Trump. “But we expect the near-term impact to weigh on estimates and sentiment until a clearer path to mitigation is outlined”.
But since then the company has been counting the costs of his trade policies. He threatened to hit the company with an unspecified tax if it attempted to sell motorcycles made outside the US back into the country.
The Milwaukee-based manufacturer on Monday said it would be significantly impacted by the United States’ tariffs on European Union products.
“We’re having a trade war with the entire world, on everything”, said Monica de Bolle, a senior fellow at the Peterson Institute for International Economics.
The EU responded to U.S. tariffs on steel and aluminium, but hitting a series of American products with import taxes, including motorcycles, bourbon and blue jeans. Trade Commissioner Cecilia Malmstrom said Tuesday that “there has to be consequences if you do not respect worldwide, global rules”.
Europe is its second-largest market behind the United States. Changing demographics like aging baby boomers are to blame, but Harley-Davidson also has failed to attract younger consumers.
Harley has been aiming to boost overseas sales of its motorcycles to 50 percent of annual volume from about 43 percent.
“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”, said Robert Martinez Jr., president of the International Association of Machinists and Aerospace Workers. Shifting manufacturing closer to those markets will lower costs and help Harley-Davidson maintain its profit margins – a typical strategy among vehicle manufacturers.