U.S. trade policy drives Harley Davidson to create European Union jobs
26 June, 2018, 05:03 | Author: Regina Lloyd
Harley-Davidson is moving some of its production outside of the United States to avoid the impact of steep new European Uniontariffs targeting American-made motorcycles. Those duties served as the bloc's response to Trump's imposition of steel and aluminum tariffs on European Union, which the president justified under specious "national security" grounds.
In late April, Harley said Trump's metal tariffs would inflate its costs by an additional $15 million to $20 million this year on top of already rising raw material prices that it expected at the start of the year. Now, lawmakers are weighing in.
Harley said ramping up production overseas could take at least nine to 18 months.
The European Union is taxing a range of imports from the United States in response to President Donald Trump's decision to slap tariffs on European steel and aluminum.
"The ultimate goal if we can get there is no tariffs, or, if anything, few tariffs on anything", Governor Walker said Monday.
Harley-Davidson's USA bike revenue dropped 8.5% a year ago from 2016, but only fell 0.4% in Europe.
Wisconsin-based Harley-Davidson said the increased costs from the European Union tariffs were a "substantial" burden and a threat to its worldwide sales, which it has been trying to expand.
"Taxes just a Harley excuse - be patient!" he added.
Harley-Davidson did not immediately return a request for comment.
In January, the company announced the closure of a plant in Kansas City, Missouri, after its motorcycle shipments fell to their lowest level in six years. It also announced a future plant in Thailand.
Harley's move is an example of what economists say will likely be a growing trend: businesses leaving the U.S. because of Trump's tariffs.
Not long ago, US President Donald Trump pointed to Harley-Davidson as an example of what was going to go right for manufacturing in America. The group will examine technology policy, government assistance to businesses and other issues in order to guarantee support for global trade. Daimler produces vehicles in the U.S.
And the USA energy industry could lose some of its competitive advantage if there are changes to the North American Free Trade Agreement, which is now in danger of breaking up based on disagreements between the US and Canada and Mexico.
Tech entrepreneurs are also concerned that the tariffs make it harder to invent the kinds of new products that drive US innovation. Harley-Davidson claimed Monday that the E.U.'s action increased the tariffs on its motorcycles "from 6 percent to 31 percent".
Thanks to the trade war that was ostensibly meant to preserve and create American jobs, some American workers will lose theirs.
To hear President Donald Trump explain it, tariffs should force foreign manufacturers to "build them here", but Harley-Davidson's announcement shows how a trade war will give American businesses a strong incentive to relocate elsewhere.
CBS 58 reached out to Harley for a statement and have not heard back. There's disagreement on the impact on jobs. Harley-Davidson said it will shift some of its production outside of the United States to avoid the tariffs.
Walker says that's what he will push for in the wake of news that Harley-Davidson is shifting production of motorcycles headed for Europe from the U.S.to factories overseas due to increasing tariffs.
"We are now assessing the potential impact on our USA facilities", Harley-Davidson spokesperson Michael Pflughoeft told Bloomberg. "Tariffs can diminish trade flows, but ideas are easily relocated".
Thus far, it has mostly worked with Inventec, but builds about 30 percent of the units with Luxshare Precision Industry Co. For the deluxe AirPods and the new HomePod , Apple will reportedly work with Foxconn as part of an expanded alliance.
Despite some reprieve in the revised tariff lists, US consumers will likely still feel the effects of higher prices down the road. Within hours, Trump responded with a threat to impose a 20 percent tariff on cars imported from the European Union .
The outcry led the president to reverse course under political pressure and sign an executive order Wednesday to end the policy. More than 2,300 children have been separated from their parents, and thousands of families are likely to remain fractured.
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