COMMENT: Harley-Davidson hits Trump where it hurts most -- his ego

Harley-Davidson to move production for some motorcycles out of US after EU tariffs

Harley-Davidson to move production for some motorcycles out of US after EU tariffs

Donald Trump used his Tuesday morning Twitter proclamations to go after Harley Davidson for moving their production overseas.

President Donald Trump on Tuesday threatened the iconic motorcycle company Harley-Davidson with severe taxes and a public revolt that would eventually put the 115-year-old firm out of business, blasting the Wisconsin firm for a plan to move some operations outside the U.S.as a way to avoid getting caught in the middle of an escalating trade war. Harley-Davidson said Monday that the E.U.'s action increased the tariffs on its motorcycles "from 6 percent to 31 percent".

Harley announced Monday that because of the European Union's new tariffs on United States motorcycles -retaliation for Trump's steel and aluminum tariffs - the company was shifting some production to non-US plants.

Moving production overseas is expected to require nine to 18 months, meaning that in the near term the company will absorb the costs of higher European Union tariffs. On a full-year basis, though, the company estimated the impact would be between $90 and $100 million.

"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", Robert Martinez Jr., president of the International Association of Machinists and Aerospace Workers, said in a statement. Taxes just a Harley excuse - be patient!

Some analysts expect to see more instances of company shifts when the second-quarter earnings season kicks off next month. This development comes amid concerns from Trump critics that the country is getting closer to an global trade war on multiple fronts.

The move comes against the backdrop of already slumping sales for Harley.

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"Will Harley use any excuse to ship jobs overseas?" Harley-Davidson had announced that it would be closing a plant in Kansas City, and laying off around 800 workers there.

The company's announcement sparked a massive selloff in the stock market amid fears that other companies might follow suit, anxious about getting caught in the middle of Trump's trade war with Europe, Canada, Mexico, China, Japan, and possibly India. That was long before Tariffs were announced. "Shows how unbalanced & unfair trade is, but we will fix it...."

He alleged Harley-Davison's Monday announcement that it would move some more operations outside the USA was long planned and that it was using Europe's new tariffs as an excuse.

A Harley-Davidson spokesman said the company had nothing to say in response to Trump's tweet beyond its filing with the U.S. Securities and Exchange Commission.

The EU last week began slapping tariffs on American imports like bourbon, peanut butter and orange juice.

Harley-Davidson won't face any additional tariffs in India, as had been previously rumored. In the U.S., Harley-Davidson sold 147,972 motorcycles past year, according to company data.

In another tweet aimed at Brussels, Mr Trump warned the European Union that the U.S. was close to concluding a study on tariffs on auto imports. He had increased import duties on aluminum and steel, and this increased its manufacturing cost by some $20 million.

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