Donald Trump has always praised the Wisconsin company Harley Davidson as an American icon and successful American manufacturer who created jobs in the US. Trump even hosted Harley-Davidson executives at the White House back in February 2017, where he called the firm a “true American icon” and thanked it “for building things in America.”
But now due to Trump’s trade war, Harley Davidson is having to shift the production of their bikes overseas to avoid retaliatory tariffs imposed by the European Union. Last week, the European Union hit back against Mr. Trump’s steel and aluminum tariffs with penalties on $3.2 billion worth of American products, including bourbon, orange juice, playing cards and Harley-Davidsons.
Harley Davidson said that the European tariffs on their motorcycles increased from 6% to 31%, and estimated that it would add about $2,200 on average to every motorcycle exported. Rather than pass that cost along, the company said it would shift production to its overseas facilities to avoid the European Union tariffs.
“Harley-Davidson believes the tremendous cost increase, if passed on to its dealers and retail customers, would have an immediate and lasting detrimental impact to its business in the region, reducing customer access to Harley-Davidson products and negatively impacting the sustainability of its dealers’ businesses,” the company said in the filing.
This is a prime example of how Donald Trump’s trade war is “beginning to ripple through the United States economy as domestic companies begin struggling with a cascade of tariffs both here and abroad. While Mr. Trump says his trade policy is aimed at reviving domestic manufacturing, Harley-Davidson’s decision shows how the administration’s moves could have the unintended effect of reducing employment and economic growth in the United States,” according to The New York Times.
Harley-Davidson said that shifting targeted production from the U.S. to international facilities could take at least nine to 18 months to be completed.