U.S. trade policy drives Harley Davidson to create European Union jobs

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In response, the European Union hit the USA with tariffs on $3.2 billion worth of American products, including motorcycles.

Harley estimates the European tariff increase from 6 percent to 31 percent on motorcycles would add $2,200 to the cost of an average motorcycle exported from the U.S.to the EU.

Wisconsin-based Harley-Davidson has assembly plants in Australia, Brazil, India and Thailand.

Trump said he has fought hard for the company and was surprised by its plans, which he described as waving the "White Flag".

The company reports it sold about 40,000 motorcycles in the European Union market in 2017, and that "Europe is a critical market for Harley-Davidson". Most young people are too buried in student loans or the gig economy to shell out more than $20,000 for a part-time ride, so to prop up flagging popularity here at home, Harley-Davidson began trying to improve foreign sales. In the U.S., Harley-Davidson sold 147,972 motorcycles past year, according to company data.

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

"Unfortunately, this confirms my concerns and is a far too predictable outcome of policies that give companies like Harley-Davidson incentives to make their products elsewhere", Johnson said in a statement.

It will instead absorb a significant amount of the cost in the near term. It's likely that one or more of these plants will take on the production that leaves the US. Sales of the company's bikes have already been stung in recent years, with the initial bite of the recession followed by a general downturn in interest from Millennial riders. A year after Trump pulled the USA out of the TPP in January 2017, Harley announced it would close its factory in Kansas City and consolidate production in York, Pennsylvania, eliminating about 260 jobs. By comparison, it sold 161,658 motorcycles in the United States during the same period. It wasn't immediately known whether any other facilities would be consolidated.

In response, Trump blasted Harley-Davidson for using the tariffs as an "excuse" to move more of their manufacturing overseas.

Not only is this going to probably cost Americans jobs, but it's also going to put a real crimp in Harley's whole "Made in America" thing.

The EU tariffs on 3.4 billion dollars (£2.5 billion) of USA products are in retaliation over duties the Trump administration is imposing on European steel and aluminium.

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

The Trump administration's tariffs have tended to target raw materials like steel or aluminum, or building block materials like solar modules. "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".

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