Trump Criticizes Harley-Davidson, Which will Relocate its Production to Avoid European Taxes

Harley-Davidson relocates to avoid taxes

COMMERCIAL WAR: The motorcycle builder, Harley-Davidson, estimates that the taxes imposed by the European Union increase the price of each bike of 2,200 dollars …

The first consequences of the customs wrestling between the United States and the European Union are already being felt. Harley-Davidson announces it will be releasing its production of motorcycles for export outside the United States in order to escape European tariffs. The American motorcycle builder hopes to escape the tax increase introduced by Brussels on US products.

On Monday night, Donald Trump criticized the company, saying “surprised” that, “of all American companies,” Harley-Davidson is “the first to wave the white flag.” “I have fought hard for them and in the end they will not pay customs duties to Europe (…) Customs taxes are just a pretext. Be patient, “said the US president on Twitter.

2,200 dollars of increase by motorcycle

Higher taxes convinced Harley-Davidson to relocate its production. In a statement released on Monday, the manufacturer in Milwaukee, Wisconsin, lamented that European tariffs have gone from 6% to 31% on its motorcycles entering the European market, increasing the retail price of each vehicle by $ 2,200.

The group, of which the European Union is the second largest market behind the United States with 40,000 motorcycles sold last year, indicates that it does not want to pass on this price increase to its customers. “This would have a lasting and immediate negative impact on our business in the region (…) affecting the viability of our dealers,” writes Harley-Davidson.

A transfer to 30 million dollars

As a result, the group prefers to “shift the production of motorcycles destined for the European Union to its international factories rather than to the United States in order to avoid the burden of customs duties”, explains the group.

The company expects that the immediate cost of the tariffs and the investments related to the transfer of production will affect the company’s accounts by 30 to 45 million dollars by the end of 2018. Over a full year, the cost will amount to between $ 90 and $ 100 million.

In response to the imposition by the United States of tariffs on steel (25%) and aluminum (10%) in Europe , the European Union imposes a 25% tax since the 22nd June on a series of American products ranging from peanut butter to bourbon, jeans and motorcycles.

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