Harley-Davidson has plans to relocate some of its production outside of the United States to avoid tariffs that were imposed by the European Union as part of the tit-for-tat trade war with the United States of America.
In the filing of the company to the market regulator of the United States, the iconic manufacturer of motorcycles stated: “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.”
Currently, Harley-Davidson has production plants that are located in Brazil, Australia, Thailand, and India. However, the company is based in Wisconsin.
The motorcycles of the company were included among a list of goods from the United States that were targeted by the European Union when it struck back against the decision of Donald Trump to impose tariffs on steel and aluminium.
Other goods from the United States that were affected by the 25 percent tariffs include products such as bourbon and orange juice.
Harley-Davidson said that the said policy would result in an incremental cost of approximately $2,200 (£1,657) per average motorcycle that is exported from the United States to the European Union, translating as an incremental cost of $30 million to $45 million for the rest of this year.
The company stated: “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.”
Back in March, a warning was released by the European Association of Motorcycle Manufacturers (ACEM) over a possible deterioration in US-EU trade relations, saying that it is “deeply concerned” at the recent statements that were made by both parties.
The ACEM said that while it appreciated the reasons behind a possible retaliation by the European Union if the United States increases the tariffs on imported steel and aluminium, the motorcycle industry would the be “severely damaged” if it is brought into the trade war.
The European Union is not the only one that has fallen foul of the isolationist trade policies of US President Trump. China, his most high profile foe, has also been hit with tariffs on $50bn worth of goods from the country.