The E.U. Friday instituted almost $3.3 billion worth of taxes on imports from the United States, including Harley-Davidson motorcycles, in response to the Trump administration's 25 and 10 percent tariffs on steel and aluminum, respectively, imposed in late May.
The EU imposed retaliatory tariffs last week on $3.4 billion worth of US 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.
In an interview on Morning Edition Tuesday, union leader Joe Capra, who represents workers at the Kansas City plant, said Harley-Davidson has been moving operations out of the USA for some time, and the company is using the new tariffs as an "excuse" to continue that trend.
The new taxes are meant to answer tariffs the Trump administration is requiring on steel and aluminum imports from Europe. "Harley must know that they won't be able to sell back into United States. without paying a big tax!" he said in another tweet.
Long term, Harley will attempt to offset the tariffs by moving production of motorcycles destined to European countries to its facilities outside the United States, like Brazil, Thailand, Australia, and India. The company announced plans to build the new factory in Thailand after the Trump administration withdrew from the Trans-Pacific Partnership, a trade agreement that would have lowered Asian tariffs on some of its motorcycles.
Harley-Davidson said that shifting targeted production from the U.S.to worldwide facilities could take at least nine to 18 months to be completed.
In February, Harley-Davidson announced the recall of 251,000 motorcycles due to possible brake failures, a move estimated to have cost the company $25 million. "Hence, they were just using Tariffs/Trade War as an excuse", he said on Twitter. "Made in America. Harley-Davidson". The ugliness of the Harley Davidson spat has spilled over into a large dispute about the U.S. trade deficit with India, which, at $ 23 billion, is less than a tenth of Beijing's surplus with Washington. The company maintains facilities in Brazil, India and Thailand where it completes assembly of motorcycles for sales in those and other markets. "We want to intensify the dialogue with the U.S. House and the Senate", said Bernd Lange, chair of the European Parliament's trade committee. Setting up production facilities overseas will take between nine and 18 months, the company said.
All three states voted for Donald Trump in the 2016 presidential election. And he's frequently invoked the company in his trade rhetoric, saying "they're treated very unfairly in various countries". Europe is a critical market for Harley-Davidson. These range from cranberry and orange juice concentrate, to bourbon, jeans, and Harley-Davidson's bikes. Those countries retaliated with tariffs of their own.
Instead of raising prices for consumers, the company says it will take a hit of $30 million to $45 million in 2018.
Last year, as Breitbart News reported, about 183 American workers were laid off by the motorcycle company in Kansas City and Menomonee Falls.
"Therefore, Harley-Davidson will not raise its manufacturer's suggested retail prices or wholesale prices to its dealers to cover the costs of the retaliatory tariffs".
The company reiterated today that it was moving some production of motorcycles destined for sale in the European Union to its existing worldwide facilities to "address the additional tariffs imposed by the European Union".
Trump slammed the Milwaukee-based motorcycle company on Monday for waving a "white flag" with the EU.
Why did the European Union impose these tariffs? That makes the market second to the US. The European Union responded by placing tariffs on bourbon whiskey, jeans, and motorcycles, as Trump's approach to trade negotiations quickly turned into what many fear is becoming an worldwide trade war.
Last week German automaker Daimler AG cut its 2018 earnings outlook, a change that it says is partly due to increased import tariffs for USA vehicles in China.