The good ol’ boys in Milwaukee have seen the writing on the wall it seems, and in a desperate bid to avoid rising trade tariffs specifically targeted at the iconic Harley-Davidson brand in retaliation to US tariffs recently placed upon the European Union, Harley-Davidson are shifting production of some models in a bid to get around.
In a filing to their investors, Harley-Davidson have announced a plan to shift production of some of the models out of the US in order avoid the new EU import tariffs.
The new 31% import tariffs on Harley-Davidson motorcycles came into effect on June 22 and were imposed by the EU as a response to the steel and aluminium tariffs brought by the American government under the Trump Administration.
Harley-Davidson say the tariffs will result in approximately US$2200 (NZ$3190) being added to the export cost of each motorcycle.
Motorcyclenews.com reports the company as stating: “To address the substantial cost of this tariff burden long-term, Harley-Davidson will be implementing a plan to shift production of motorcycles for EU destinations from the U.S. to its international facilities to avoid the tariff burden. Harley-Davidson expects ramping-up production in international plants will require incremental investment and could take at least nine to 18 months to be fully complete.”
Although they gave no word to their investors as to where production will likely shift to, it is widely assumed that Harley will see its production for European models shift to India, where the company currently build their Harley-Davidson Street models along with the Street Rod 750.
Harley-Davidson estimate the tariffs will cost them US$90 – 100 million a year, which is approximately one third of their entire operating profit.
Moving production out of the US to avoid the tariffs seems like the only option the company has, which is also a massive backfire of President Trump’s “Make America Great Again” slogan with job losses as production shifts outside the US almost a certainty.