Donald Trump claimed on Tuesday that the iconic tough-guy brand Harley-Davidson has ‘surrendered’ to hostile foreign government in a trade war and risks facing massive and unprecedented tariffs on anything it ships into the U.S. from a planned production facility in Thailand.
‘A Harley-Davidson should never be built in another country – never! Their employees and customers are already very angry at them,’ the president tweeted.
‘If they move, watch, it will be the beginning of the end – they surrendered, they quit! The Aura will be gone and they will be taxed like never before!’
The president will head Thursday to the motorcycle manufacturer’s home state of Wisconsin for events that include at least one stop in Harley-Davidson’s headquarters city of Milwaukee.
‘When I had Harley-Davidson officials over to the White House, I chided them about tariffs in other countries, like India, being too high. Companies are now coming back to America,’ Trump tweeted Tuesday.
‘Harley must know that they won’t be able to sell back into U.S. without paying a big tax!’
The company said Monday in a statement to the Securities and exchange Commission that it could lose as much as $100 million per year if it doesn’t shift more of its manufacturing abroad.
President Donald Trump, pictured Monday night at a campaign rally for South Carolina Governor Henry McMaster, tweeted a warning Tuesday morning to Harley-Davidson
Trump flatly criticized the iconic motorcycle manufacturer for caving to tariff pressure and relocating, even as he’s threatening tariffs of his own for U.S. companies that outsource their production and then sell the resulting products in America
The president said the iconic motorcycle-maker would find itself slapped with ‘big’ tariffs in the U.S. if it tried to bring bikes home that it had manufactured in Thailand
Trump tweeted that Harley-Davidson had planned to move some production facilities to the Far East before he announced tariffs that could bring international trade numbers in balance
Trump claimed in a tweet that Harley-Davidson had already planned to move its Kansas City, Missouri operations overseas ‘early this year,’ before he announced a series of retaliatory tariffs.
In reality, Harley CEO Matthew Levatich has said the company’s Thailand plant was built because of the president’s 2017 decision to pull out of the Trans-Pacific Partnership trading bloc.
And it announced in January that its Kansas City plant would be shuttered – not because of tariffs, but because it was producing more motorcycles that it could sell in the United States.
Trump promised that ultimately, once he brings more balance to America’s international trade equation, outsourcing will make less economic sense.
The president said his administration is ‘getting other countries to reduce and eliminate tariffs and trade barriers that have been unfairly used for years against our farmers, workers and companies.’
‘We are opening up closed markets and expanding our footprint. They must play fair or they will pay tariffs!’
Harley-Davidson’s rationale for shifting some of its production to the Far East was an increase in taxes on products shipped into the European Union.
‘Increasing international production to alleviate the EU tariff burden is not the company’s preference,’ it said in a regulatory filing, ‘but represents the only sustainable option.’
The Wisconsin-based company said it could lose $100 million next year if it doesn’t find a way to avoid paying tariffs newly imposed by the European Union on American products, including motorcycles
Trump slammed the company on Monday, saying it was ‘the first to wave the White Flag’
The EU’s latest tariffs will include a whopping 31 per cent penalty on motorcycles, amounting to a 25 per cent increase in costs. Previously tariffs on the bikes were fixed at just 6 per cent.
Harley-Davidson said its bikes will cost an average of $2,200 more apiece to export under those rules.
Trump told the company on Monday that it should ‘be patient’ because ‘ultimately they will not pay’ those tariffs.
The president added that he was ‘surprised that Harley-Davidson, of all companies, would be the first to wave the White Flag.’
Trump said Tuesday that Harley-Davidson’s decision came ‘long before’ he engaged in a tit-for-tat exercise of tariff levies.
‘Hence, they were just using Tariffs/Trade War as an excuse,’ he said. ‘Shows how unbalanced & unfair trade is, but we will fix it.’
Trump abruptly ended an exemption to the global tariffs for Europe, Mexico and Canada on June 1 after temporarily holding off on the 10 per cent tax for aluminum imports and 25 per cent penalty for steel.
The EU said Friday that it would counter the tariffs with penalties of its own on $3.2 billion worth of American-made goods.
That list includes big-ticket products like motorcycles and motorboats, and lower-cost items like cigarettes and denim.
‘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, according to CNN, said.
Harley-Davidson determined that the tariffs would therefore eat up $30 million to $45 million of the current year’s profit. It projected that costs would rise $90 to $100 million annually after that.
Spokesman Michael Pflughoeft told CNN that as of Monday Harley-Davidson was still ‘assessing the potential impact’ on the company’s 6,000-plus workforce that is mainly concentrated in Pennsylvania, Missouri and Wisconsin.
It also has production facilities in India, Brazil and Thailand.
Harley-Davidson’s stock dipped 6 per cent on Monday as it became embroiled in a raging trade dispute between the U.S. and Europe, which accounts for a significant amount of its sales.
Trump told the motorcycle manufacturer that it should ‘be patient’ because ‘ultimately they will not pay tariffs’ on products shipped into the European Union
In 2017, the company sold 40,000 bikes in Europe, its second largest market, CNN report, compared to the 148,000 customers who bought two-wheel vehicles in the U.S. from Harley-Davidson.
The United States says it is imposing the tariffs on steel and metal worldwide in order to protect America’s metal industries.
Trump’s economic and trade advisers have characterized the tariffs as a matter of national security, although even the president has said that they’re also being imposed for other reasons.
In the case of Europe, the president has blasted trade imbalances with EU nations such as Germany.