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Harley-Davidson plans to shift some motorcycle production away from the US to avoid the "substantial" burden of European Union tariffs.

Last week, the EU imposed retaliatory tariffs on US goods, including bourbon, orange juice and motorcycles.

The measures are a response to new US duties on steel and aluminium imports.

Wisconsin-based Harley-Davidson said the increased cost from the tariffs threaten its international sales, which it has been trying to expand.

The company has assembly plants in Australia, Brazil, India and Thailand as well as in the US.

It said it would raise investment in its international plants, though it did not say which ones.

"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 US to its international facilities to avoid the tariff burden," the company said.

Harley-Davidson said it expected the ramp-up in production to take nine to 18 months.

US President Donald Trump tweeted his disappointment at Harvey-Davidson's decision which he characterised as the company waving the white flag of defeat.

The company's move is one of the most visible consequences of the trade disputes triggered by Mr Trump's decision to levy tariffs on steel and aluminium imports.

Mr Trump says the duties are necessary to protect the US steel and aluminium industries, which are vital to national security.

They have drawn retaliation from the EU, Canada, Mexico, India and others while driving up the cost of metals for manufacturers in the US.

US companies that range from boat-builders to nail manufacturers have warned about the consequences of escalating trade tensions.

However, the tariffs have also helped to spur investment in US steel plants.

For example, British-owned GFG Alliance, has said it plans to invest $5bn over several years to reopen a shuttered steel plant in South Carolina. The firm says the move will put about 125 people back to work "immediately".

'Only sustainable option'

Harley-Davidson said the EU's tariffs would add, on average, $2,200 (£1,660) to each bike exported to Europe from the US as the import tax increases from 6% to 31%.

Harley, which sold nearly 40,000 motorcycles in Europe last year, said it planned to absorb those costs rather than pass them onto customers and risk hurting sales.

Shares in the company sank almost 6% after the firm announced its decision, which is expected to add between $30m and $45m to its expenses this year.

Harley-Davidson said the tariffs make shifting production "the only sustainable option to make its motorcycles accessible to customers in the EU and maintain a viable business in Europe".

Harley-Davidson, which has been focused on expanding its overseas sales, said it remained committed to US manufacturing.

Media playback is unsupported on your device Media caption How hogs and Harleys became weapons in a looming trade war.

The company employed about 2,100 people at manufacturing plants in the US at the end of last year.

It had already announced plans to close a plant in Kansas City, Missouri - a decision which workers claimed was due to the opening of a new facility in Thailand.

Harley-Davidson has disputed those allegations, arguing the move was about boosting overseas sales.

Analysis

Kim Gittleson, New York Business Correspondent

In early 2017, President Donald Trump met with executives from Harley-Davidson who he thanked for "building things in America".

But just over a year later, Harley serves as a sobering example of what happens when Trump's America First trade policy collides with the rest of the world.

While Harley-Davidson had been struggling financially well before the EU's retaliatory tariffs went into effect, the import duties of 25% certainly didn't help matters.

It is worth mentioning that Harley could make the decision to shift production because it had chosen, in 2017, to open a new manufacturing plant in Thailand.

At the time, the company said it was moving manufacturing there to avoid a different tariff: this one being the 60% duty levied on Thai imports. That decision, of course, was made after Trump decided to pull out of the Trans-Pacific Partnership, a trade treaty that Harley had said it supported.

All of which goes to show that when it comes to "winning" a trade war, the only certainty is the unintended consequences that inevitably result when decades of trade policy are reversed in a matter of months.

United Steelworkers, which represents some Harley employees and has supported some of the president's tariff announcements, said it does not know yet how the company's decision will affect US employment.

Michael Bolton, a director at United Steelworkers, said: "Harley's desire to improve sales both domestically and abroad predates the Trump administration's tariffs, as does the company's willingness to build assembly facilities overseas to avoid tariffs.

"The company built its reputation and image by making motorcycles here, and if the company wants to continue to market itself as an iconic American brand both at home and abroad, it needs to focus on US production," he added.

'Headwind to hiring'

Mr Trump had made raising manufacturing employment a goal, but economists warn that the escalating trade tensions are likely to be counter-productive.

In addition to the metals tariffs, the Trump administration has also said it will impose tariffs on $34bn of Chinese goods starting on 6 July as punishment for violations of intellectual property protections.

China is due to retaliate in kind.

Mr Trump has also threatened tariffs on foreign cars and auto parts, arguing that firms should make such products in the US.</s>Harley-Davidson will begin to shift the production of motorcycles headed for Europe from the US to factories overseas as it faces spiralling costs from tariffs.

The European Union began rolling out tariffs on American imports like bourbon, peanut butter and orange juice last week.

The EU tariffs on 3.4 billion dollars (â¬2.9 billion) of US products are in retaliation over duties the Trump administration is imposing on European steel and aluminium.

US president Donald Trump has used Harley-Davidson as an example of a US business that is being harmed by trade barriers. However, Harley-Davidson has warned consistently against tariffs, saying they would hurt sales.

The company sold almost 40,000 motorcycles in the European Union last year, generating revenue second only to the United States, according to the Milwaukee company.

The company had warned against Mr Trump’s trade moves (AP)

The maker of the iconic American motorcycle said in a regulatory filing that EU tariffs on its motorcycles exported from the US jumped between 6% and 31%, which translates into an additional, incremental cost of about 2,200 dollars (â¬1,886) per average motorcycle exported from the US to the EU.

“Harley-Davidson maintains a strong commitment to US-based manufacturing which is valued by riders globally,” the company said in prepared remarks.

“Increasing international production to alleviate the EU tariff burden is not the company’s preference, but represents the only sustainable option to make its motorcycles accessible to customers in the EU and maintain a viable business in Europe. Europe is a critical market for Harley-Davidson.”

Harley-Davidson will not raise its prices to avert “an immediate and lasting detrimental impact” on sales in Europe, it said. It will instead absorb a significant amount of the cost in the near term. It anticipates the cost for the rest of the year to be approximately 30 million dollars (â¬25.7 million) to 45 million dollars (â¬34 million).

Harley-Davidson said that shifting targeted production from the US to international facilities could take at least nine to 18 months to be completed.</s>President Trump is unhappy with Harley-Davidson's plans to move production of motorcycles it sells in Europe overseas, in response to growing trade friction between the United States and Europe.

In a tweet sent out Monday afternoon, Trump said he was surprised that Harley-Davidson "of all companies, would be the first to wave the White Flag. I fought hard for them...."

European officials last week imposed stiff tariffs on a wide range of U.S.-made goods sold within the European Union. The move came in response to President Trump's recent decision to slap tariffs on European imports.

In a Securities and Exchange Commission filing Monday, Harley-Davidson said the tariffs imposed by the EU "would have an immediate and lasting detrimental impact to its business in the region."

The company reported $5.65 billion in revenues last year and Europe is its largest overseas market, with almost 40,000 customers buying motorcycles there in 2017.

The European tariffs have jumped from 6 percent to 31 percent, the company said. That increase will add $2,200 on average to the cost of each motorcycle sold in the EU and cost the company $90 million to $100 million a year, the filing said.

"Increasing international production to alleviate the EU tariff burden is not the company's preference, but represents the only sustainable option to make its motorcycles accessible to customers in the EU and maintain a viable business in Europe," the filing said.

Trump has frequently heaped praise on the company as a strong manufacturer with a long history of making motorcycles domestically.

But after Monday's announcement, Trump said the company should be patient, noting, "ultimately they will not pay tariffs selling into the E.U., which has hurt us badly on trade, down $151 Billion."

The company did not say where production would be shifted, or how many jobs might be affected, but said the move would take nine to 18 months to complete.

It also did not say which U.S. factories would be affected. The company's U.S. factories are in York, Pa., and Menomonee Falls, Wis. It plans to close another plant in Kansas City, Mo., next year.

Leaders of the unions representing the plant workers say the company has been gradually shifting production to plants in India, Brazil and Thailand for some time.

Robert Martinez Jr., international president of the International Association of Machinists and Aerospace Workers, released a statement after Monday's announcement:



"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. Harley pounced on news released Friday regarding EU tariffs on Harley motorcycles and the company will be implementing plans to offshore more production. "Even before the EU's announcement, Harley made the decision to close its plant in Kansas City and has manufacturing facilities in India and Brazil. It also announced a future plant in Thailand. This latest move is in keeping with Harley's past decisions to open plants outside of North America. "Will Harley use any excuse to ship jobs overseas? Does Harley even understand what 'Made in America means?'"



Republican Sen. Ben Sasse of Nebraska, who has criticized the Trump administration's reliance on tariffs against U.S. trading partners, took issue with Monday's tweet.

"This will go over like a Vespa at Sturgis. The problem isn't that Harley is unpatriotic — it's that tariffs are stupid. They're tax increases on Americans, they don't work, and apparently we're going to see more of this," he said.

Harley-Davidson declined to comment beyond the filing released Monday.</s>U.S. motorcycle manufacturer Harley-Davidson Inc announced it is shifting some of its American production to the European Union overseas in order to avoid EU’s retaliatory tariffs.

The Milwaukee-based motorcycle manufacturer which was founded in 1903 took the decision after President Donald Trump imposed tariffs on steel and aluminum imports from the European Union and NATO members, provoking a “tit-for-tat” response from the trading bloc against U.S. goods.

Under the new tariffs, imported steel will be taxed at 25 percent. Meanwhile, aluminum will be taxed at a 10 percent.

Harley-Davidson stated that the tariffs on motorcycles rose from 6 percent to 31 percent. This meant each exported motorcycle cost an additional $2,200 for the buyer. 16 percent of the company’s sales are to the European market.

As a result, to avoid the additional costs, the heavyweight U.S. motorcycle manufacturer decided to relocate some of its American production overseas.

Trump’s tariffs harmed the company so much that its shares closed down nearly 6 percent and analysts cut their profit forecasts on concerns about how quickly the company would be able to adapt to the 25 percent import duties the European Union began charging on June 22.

In the beginning of May 2018, economic experts had warned the Trump administration of the adverse effects of the tariffs. Harley-Davidson also released a statement at that time and said they support free trade.

“We support free and fair trade and hope for a quick resolution to this issue. We believe a punitive, retaliatory tariff on Harley-Davidson motorcycles in any of our major markets would have a significant impact on our sales, our dealers, our suppliers and our customers in those markets,” the statement read.

As soon as the company announced its decision to relocate, Trump took to his favorite social media tool Twitter to criticize the move.

However, the president seems to forget that with his tariffs, he is directly hurting the company he once praised.

“In this administration, our allegiance will be to the American workers and to American businesses, like Harley-Davidson, that were very strong in the 1980s and I remember this — you were victims of trading abuse — big trading abuse, where they were dumping all sorts of competitors all over the place,” Trump said to Harley-Davidson executives in February of 2017. “And Ronald Reagan stepped in and he put on large tariffs and you wouldn’t be talking about Harley-Davidson probably right now if he didn’t do that.”

Harley-Davidson has plants in Australia, Thailand, Brazil, India and the United States. The company said it will raise investment in its plants overseas but didn’t reveal details.

In May, the United States set stage for a potential trade war with some of its top allies after the Trump administration ended a two-month exemption by hitting the European Union, Canada and Mexico with steel and aluminum tariffs.

Apart from Harley-Davidson, the largest nail producer is also suffering the latest changes. Since Trump slapped the tariffs, Missouri based-company Mid Continent Nail Corporation lost 50 percent of its business in merely two weeks.

The company said it had to lay off nearly sixty of its temporary workers and also fears an additional 200 workers will have to be laid off.

Trump who often touts about making America great again is doing the complete opposite with his actions. If anything, these tariffs are forecasted to have an adverse impact on the economy.</s>US President Donald Trump on Monday slammed Harley-Davidson Inc after the motorcycle maker said it would move production for European customers overseas to avoid retaliatory tariffs that could cost it up to US$100 million (S$136.2 million) per year.

[BENGALURU] US President Donald Trump on Monday slammed Harley-Davidson Inc after the motorcycle maker said it would move production for European customers overseas to avoid retaliatory tariffs that could cost it up to US$100 million (S$136.2 million) per year.

Mr Trump said he has fought hard for the company and was surprised by its plans, which he described as waving the "White Flag." Harley-Davidson, the dominant player in the heavyweight US motorcycle market said earlier on Monday it would not pass on any retail or wholesale price increases in the EU and instead focus on shifting some US production.

Harley shares closed down nearly 6 per cent and analysts cut their profit forecasts on concerns about how quickly the company would be able to adapt to the 25 per cent import duties the European Union began charging on June 22.

"I fought hard for them and ultimately they will not pay tariffs selling into the EU, which has hurt us badly on trade, down US$151 Billion. Taxes just a Harley excuse - be patient!" Mr Trump said in a post on Twitter.

The United States earlier this month imposed tariffs on steel and aluminum imports from the European Union, provoking a"tit-for-tat" response from the trading bloc against US goods.

In a regulatory filing, the 115-year-old Milwaukee, Wisconsin-based company said the retaliatory duties would result in an incremental cost of about US$2,200 per average motorcycle exported from the United States to the European Union, but did not provide more details on current motorcycle costs.

The company said it expects the tariffs to result in incremental costs of US$30 million to US$45 million for the rest of 2018 and US$80 million to US$100 million on a full-year basis.

"We think Harley's decision to protect EU demand is wise for the long-term health of the market," Baird Equity Research said in a note. "But we expect the near-term impact to weigh on estimates and sentiment until a clearer path to mitigation is outlined."

Mr Trump vowed to make the iconic motorcycle maker great again when he took office last year. But since then the company has been counting the costs of his trade policies.

In late April, Harley said Mr Trump's metal tariffs would inflate its costs by US$15 million to US$20 million this year on top of already rising raw material prices that it expected at the start of the year.

White House trade and manufacturing adviser Peter Navarro said on Monday the administration wants Harley to make more motorcycles in the United States.

"Remember, they came to us, for example, pointing out that India had a 100 per cent tariff on Harley Davidsons. That's certainly not fair," Mr Navarro told CNBC. "We want Harleys made here, more made here, and that's going to happen under the president's trade policies."

In response to Mr Navarro's comments, a Harley spokesman said the company has made its position clear in Monday's filing.

Harley has been aiming to boost overseas sales of its motorcycles to 50 per cent of annual volume from about 43 per cent.

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.

In 2017, Harley sold nearly 40,000 new motorcycles in Europe which accounted for more than 16 percent of the company's sales. The revenues from EU countries were second only to the United States.

Harley said ramping up production overseas could take at least nine to 18 months. It has three assembly plants outside the United States - one each in Brazil, India and Thailand.

The company decided to build the Thailand plant after Trump pulled out from the Trans-Pacific Partnership, which would have lowered import tariffs on its bikes in some of the fastest-growing motorcycle markets in Asia.

The company said it will provide more details on tariff-related plans when it reports second-quarter earnings on July 24.

Analysts at Baird Equity Research cut its 2018 profit estimates for Harley-Davidson to US$3.70 per share from US$3.90 and now expect 2019 profit of US$3.85, down from US$4.20.

CFRA Research lowered its 12-month price target for the stock to US$47 from US$49.

Harley-Davidson shares have lost about 9 per cent since early March when the trade skirmish between the United States and the EU started, and are down over 18 per cent since end-December 2017.

Mercedes-Benz maker Daimler last week cut its 2018 profit forecast citing growing trade tensions. Its German rival BMW said it was considering "possible strategic options" in view of the rising trade tensions between China and the United States.

Mr Trump has also threatened to crackdown on auto imports. Analysts at Moody's reckon a 25 per cent tariff on imported vehicles and parts would be negative for most of companies including Ford Motor Co and General Motors Co.</s>(Reuters) - Harley-Davidson Inc said on Monday it would move production of motorcycles shipped to the European Union from the United States to its international facilities and forecast the trading bloc’s retaliatory tariffs would cost the company $90 million to $100 million a year.

The shift in production is an unintended consequence of U.S. President Donald Trump’s administration imposing tariffs on European steel and aluminum early this month, a move designed to protect U.S. jobs.

In response to the U.S. tariffs, the European Union began charging import duties of 25 percent on a range of U.S. products including big motorcycles like Harley’s on June 22.

Harley-Davidson shares sank more than 5 percent in morning trading on Monday.

In a regulatory filing, the Milwaukee, Wisconsin-based company said the retaliatory duties would result in an incremental cost of about $2,200 per average motorcycle exported from the United States to the European Union, but did not provide more details on current motorcycle costs.

The company said it would not raise retail or wholesale prices for its dealers, and expects the tariffs to result in incremental costs of $30 million to $45 million for the rest of 2018.

“Harley-Davidson believes the tremendous cost increase, if passed onto its dealers and retail customers, would have an immediate and lasting detrimental impact to its business in the region,” the company said.

Trump vowed to make the iconic motorcycle maker great again when he took office last year. But since then the company has been counting the costs of his trade policy.

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.

Struggling to overcome a slump in U.S. demand, Harley has been aiming to boost sales of its iconic motorcycles overseas to 50 percent of total annual volume from about 43 percent currently.

In January, the company announced the closure of a plant in Kansas City, Missouri as part of a consolidation plan after its motorcycle shipments fell to their lowest level in six years.

In 2017, Harley sold nearly 40,000 new motorcycles in Europe which accounted for more than 16 percent of the company’s sales last year. The revenues from EU countries were second only to the United States.

Harley said ramping up production at its overseas international plants will require incremental investments and could take at least nine to 18 months.

The company does not have any manufacturing facility in Europe. It has three assembly plants outside the United States, one each in Brazil, India and Thailand.

The company decided to build the Thailand plant in response to Trump’s decision to pull out from the Trans-Pacific Partnership which would have lowered import tariffs on its bikes in some of the fastest-growing motorcycle markets in Asia.

The company will provide more details of the financial implications of retaliatory EU tariffs and its plans to offset their impact on July 24 when its second-quarter earnings are due, the filing said.

Mercedes-Benz maker Daimler last week cut its 2018 profit forecast citing growing trade tensions. Its German rival BMW said it was considering “possible strategic options” in view of the rising trade tensions between China and the United States.

Harley shares have lost about 6 percent since early March when the trade skirmish between the United States and the EU started, and are down over 15 percent since end-December 2017.</s>MILWAUKEE — Production of Harley-Davidson motorcycles sold in Europe will move from U.S. factories to facilities overseas, the Milwaukee-based company announced Monday, a consequence of the retaliatory tariffs the EU is imposing on American exports in an escalating trade war with the Trump administration.

President Donald Trump has used the iconic American motorcycle maker as an example of a U.S. business harmed by trade barriers in other countries, but Harley had warned that tariffs could negatively impact its sales.

The European Union on Friday began rolling out tariffs on American imports including bourbon, peanut butter and orange juice. The EU tariffs on $3.4 billion worth of U.S. products are retaliation for duties the Trump administration is imposing on European steel and aluminum.

The company said in a regulatory filing Monday that EU tariffs on its motorcycles exported from the U.S. jumped between 6 percent and 31 percent, adding about $2,200 per average motorcycle exported from the U.S. to the EU.

The impact on U.S. workers because of Harley-Davidson’s decision was not immediately clear. Harley-Davidson declined interview requests Monday but said in prepared remarks that the company “maintains a strong commitment to U.S.-based manufacturing which is valued by riders globally.”

Harley-Davidson Inc. sold almost 40,000 motorcycles in the EU last year, its second-largest market after the United States, according to the company. The EU sales make up almost 16.4 percent of Harley-Davidson’s worldwide sales. In the U.S., Harley-Davidson sold 147,972 motorcycles last year, according to company data.

“Increasing international production to alleviate the EU tariff burden is not the company’s preference, but represents the only sustainable option to make its motorcycles accessible to customers in the EU and maintain a viable business in Europe,” the company said in its prepared remarks.

Harley-Davidson said it will not raise its prices to avert “an immediate and lasting detrimental impact” on sales in Europe. It will instead absorb a significant amount of the cost in the near term. It anticipates the cost for the rest of the year to be approximately $30 million to $45 million.

Shifting the production overseas could take up to 18 months, the motorcycle maker said.

The company is already struggling with falling sales. In January, it said it would consolidate its Kansas City, Missouri, plant into its York, Pennsylvania, facility. U.S. motorcycle sales peaked at more than 1.1 million in 2005 but then plummeted during the recession. It wasn’t immediately known whether any other facilities would be consolidated.

“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. The union represents Harley-Davidson workers in Milwaukee, and the Kansas City and York plants.

“Will Harley use any excuse to ship jobs overseas?” Martinez added. “Does Harley even understand what ‘Made in America’ means?”

The Trump administration has started fights with trading partners around the world, imposing tariffs on imported steel and aluminum, provoking retaliation from close U.S. allies including the European Union, Canada, Mexico and Turkey. And it has announced tariffs on $50 billion in Chinese goods — a tariff list that could swell to $450 billion if Beijing refuses to back down and counterpunches with retaliatory moves.

“More firms will follow Harley’s lead and move production overseas,” says Mary Lovely, a Syracuse University economist who studies trade. “Can’t blame them. Many companies are being put in very difficult positions.”

Lovely said Harley and other companies face retaliatory tariffs in Europe and elsewhere if they try to export products. Trump’s tariffs also raise costs on imported parts they need to manufacture in the United States.

Wisconsin’s elected leaders said the decision pointed to the need to expand markets.

“This is further proof of the harm from unilateral tariffs,” said AshLee Strong, a spokeswoman for House Speaker Paul Ryan, a Wisconsin Republican. “The best way to help American workers, consumers, and manufacturers is to open new markets for them, not to raise barriers to our own market.”

Gov. Scott Walker echoed those comments, saying increasing markets for Wisconsin and American-made goods will reduce the trade imbalance and needs for tariffs.

“The ultimate goal, if we could get there, is no tariffs or if anything few tariffs on anything,” said Walker, a Republican. “That’s what I’m going to push for, ways that we can get to a level playing field then we don’t have this tit for tat on any number of products out there.”

Associated Press writer Scott Bauer contributed from Madison, Wisconsin and AP Business Writer Paul Wiseman contributed from Washington.</s>Washington:Harley-Davidson has announced to shift some of the production of its iconic motorcycles overseas against the imposition of steep import tariffs by the European Union, leaving US President Donald Trump "surprised".

Trump, who has been taking up the case of tariffs on Harley-Davidson by India, which in part is responsible for the current trade tension between the two countries, said he is surprised by such a decision by the motorcycle manufacturer.

In fact, he accused the Wisconsin-based company of raising white flag.

Outside the US, Harley-Davidson has manufacturing facilities in India, Brazil and Australia.

The company in its US Securities and Exchange Commission (SEC) filing on Monday said that new retaliatory tariffs by the European Union (an increase from six percent to 31 percent) will result in an incremental cost of approximately $2,200 on an average motorcycle exported from the US to the EU.

"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 US to its international facilities to avoid the tariff burden," said the company without indicating to which country it plans to move its production facilities to.

Harley-Davidson said that shifting targeted production from the US to international facilities could take at least nine to 18 months to be fully completed.

The company's decision surprised Trump who has been continually raising the issue of high import tariffs on the motorcycle manufacturer elsewhere.

"Surprised that Harley-Davidson, of all companies, would be the first to wave the White Flag," he said.

"I fought hard for them and ultimately they will not pay tariffs selling into the EU, which has hurt us badly on trade, down $151 billion. Taxes just a Harley excuse - be patient!" Trump tweeted.

"The president's trade and economic policies have been a huge benefit to the American economy, and this includes the creation of over 300,000 manufacturing jobs. Unemployment is at 3.8 per cent, the lowest since 2000. And manufacturing confidence is at historic highs," White House Press Secretary Sarah Sanders told reporters at her daily news conference.

The European Union, she alleged, is attempting to punish US workers with unfair and discriminatory trade policies, and Trump will continue to push for free, fair and reciprocal trade in hopes that the EU will join is in that.

"The European Union is trying to punish US workers because they have engaged repeatedly in unfair trade practices. And the president is saying enough is enough. We'd like to work with the EU to work on a level playing field," Sanders said in response to a question.

In its SEC filing Harley-Davidson said the company maintains a strong commitment to US-based manufacturing which is valued by riders globally.

"Europe is a critical market for Harley-Davidson. In 2017, nearly 40,000 riders bought new Harley-Davidson motorcycles in Europe, and the revenue generated from the EU countries is second only to the US," the company said.</s>MILWAUKEE (AP) — Production of Harley-Davidson motorcycles sold in Europe will move from U.S. factories to facilities overseas, the Milwaukee-based company announced Monday, a consequence of the retaliatory tariffs the EU is imposing on American exports in an escalating trade war with the Trump administration.

President Donald Trump has used the iconic American motorcycle maker as an example of a U.S. business harmed by trade barriers in other countries, but Harley had warned that tariffs could negatively impact its sales.

Trump tweeted Monday that he’s surprised that Harley-Davidson was first “to wave the White Flag” in the tariff dispute between the U.S. and the European Union.

“Surprised that Harley-Davidson, of all companies, would be the first to wave the White Flag. I fought hard for them and ultimately they will not pay tariffs selling into the E.U., which has hurt us badly on trade, down $151 Billion. Taxes just a Harley excuse – be patient! #MAGA,” Trump tweeted.

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 European Union on Friday began rolling out tariffs on American imports including bourbon, peanut butter and orange juice . The EU tariffs on $3.4 billion worth of U.S. products are retaliation for duties the Trump administration is imposing on European steel and aluminum.

The company said in a regulatory filing Monday that EU tariffs on its motorcycles exported from the U.S. jumped between 6 percent and 31 percent, adding about $2,200 per average motorcycle exported from the U.S. to the EU.

The impact on U.S. workers because of Harley-Davidson’s decision was not immediately clear. Harley-Davidson declined interview requests Monday but said in prepared remarks that the company “maintains a strong commitment to U.S.-based manufacturing which is valued by riders globally.”

“The EU is attempting to punish U.S. workers with unfair and discriminatory trade policies, and President Trump will continue to push for free, fair and reciprocal trade and hopes that the EU will join us in that,” Sanders said.

Harley-Davidson Inc. sold almost 40,000 motorcycles in the EU last year, its second-largest market after the United States, according to the company. The EU sales make up almost 16.4 percent of Harley-Davidson’s worldwide sales. In the U.S., Harley-Davidson sold 147,972 motorcycles last year, according to company data.

“Increasing international production to alleviate the EU tariff burden is not the company’s preference, but represents the only sustainable option to make its motorcycles accessible to customers in the EU and maintain a viable business in Europe,” the company said in its prepared remarks.

Harley-Davidson said it will not raise its prices to avert “an immediate and lasting detrimental impact” on sales in Europe. It will instead absorb a significant amount of the cost in the near term. It anticipates the cost for the rest of the year to be approximately $30 million to $45 million.

Shifting the production overseas could take up to 18 months, the motorcycle maker said.

The company is already struggling with falling sales. In January, it said it would consolidate its Kansas City, Missouri, plant into its York, Pennsylvania, facility. U.S. motorcycle sales peaked at more than 1.1 million in 2005 but then plummeted during the recession. It wasn’t immediately known whether any other facilities would be consolidated.

“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. The union represents Harley-Davidson workers in Milwaukee, and the Kansas City and York plants.

“Will Harley use any excuse to ship jobs overseas?” Martinez added. “Does Harley even understand what ‘Made in America’ means?”

The Trump administration has started fights with trading partners around the world, imposing tariffs on imported steel and aluminum, provoking retaliation from close U.S. allies including the European Union, Canada, Mexico and Turkey. And it has announced tariffs on $50 billion in Chinese goods — a tariff list that could swell to $450 billion if Beijing refuses to back down and counterpunches with retaliatory moves.

“More firms will follow Harley’s lead and move production overseas,” says Mary Lovely, a Syracuse University economist who studies trade. “Can’t blame them. Many companies are being put in very difficult positions.”

Lovely said Harley and other companies face retaliatory tariffs in Europe and elsewhere if they try to export products. Trump’s tariffs also raise costs on imported parts they need to manufacture in the United States.

Meanwhile, the maker of Jack Daniel’s, Brown-Forman Corp., said Monday it would have to raise the price of its product sold in the EU because of the tariff hike, Bloomberg reported.

Wisconsin’s elected leaders said the decision pointed to the need to expand markets.

“This is further proof of the harm from unilateral tariffs,” said AshLee Strong, a spokeswoman for House Speaker Paul Ryan, a Wisconsin Republican. “The best way to help American workers, consumers, and manufacturers is to open new markets for them, not to raise barriers to our own market.”

Gov. Scott Walker echoed those comments, saying increasing markets for Wisconsin and American-made goods will reduce the trade imbalance and needs for tariffs.

“The ultimate goal, if we could get there, is no tariffs or if anything few tariffs on anything,” said Walker, a Republican. “That’s what I’m going to push for, ways that we can get to a level playing field then we don’t have this tit for tat on any number of products out there.”</s>Harley-Davidson says it plans to move production of motorcycles it sells in Europe overseas in response to growing trade friction between the United States and Europe.

European officials last week imposed stiff tariffs on a wide range of U.S.-made goods sold within the European Union. The response came to President Trump's recent decision to slap tariffs on European imports.

In a Securities and Exchange Commission filing Monday, Harley-Davidson said the tariffs imposed by the EU "would have an immediate and lasting detrimental impact to its business in the region."

The company reported $5.65 billion in revenues last year and Europe is its largest overseas market, with almost 40,000 customers buying motorcycles there in 2017.

The European tariffs have jumped from 6 percent to 31 percent, the company said. That increase will add on average $2,200 to the cost of each motorcycle sold in the EU, and would cost the company $90 million to $100 million a year, the filing said.

"Increasing international production to alleviate the EU tariff burden is not the company's preference, but represents the only sustainable option to make its motorcycles accessible to customers in the EU and maintain a viable business in Europe," the filing said.

The company did not say where production would be shifted, or how many jobs might be affected, but said the move would take nine to 18 months to complete.

It also did not say which U.S. factories would be affected. The company's U.S. factories are in York, Pa.; Kansas City, Mo., and Menomonee Falls, Wis. It also has manufacturing operations in Australia, Brazil, India and Thailand.
Harley-Davidson, a US motorcycle manufacturer, states that it intends to shift export production for the EU overseas. The company reports that the decision is related to rocky trade relations between the European Union and the United States.