Harley-Davidson to Move Some Production via U.S. Because of E.U. Tariffs

Harley-Davidson, the American motorcycle supplier received a, said on Monday that will the idea was shifting some of the production of its bikes outside the United States to avoid European Union tariffs imposed as part of a widening trade dispute.

The announcement, made in a public filing, can be an early sign of the financial cost to companies on both sides of the Atlantic as the United States in addition to Europe impose tariffs in addition to counter-tariffs on each different. The moves have raised the specter of a full-blown trade war as the Trump administration pursues a protectionist tack with both allies, including the European Union, Canada in addition to Mexico, in addition to rivals, like China.

Last week, the European Union imposed penalties on $3.2 billion worth of American products, many of which are produced in areas that will form the heart of President Trump’s political base, in response to steel in addition to aluminum tariffs added by the White House. The list included bourbon via Kentucky, the home state of the Senate majority leader, Mitch McConnell; as well as orange juice, which can be made largely inside the swing state of Florida; in addition to motorcycles made by Harley-Davidson, headquartered in Wisconsin, the home state of the House speaker, Paul D. Ryan.

Harley-Davidson said on Monday that will European Union tariffs on its motorcycles had increased to 31 percent, via 6 percent. the idea estimated that will the higher tariffs could add about $2,0 on average to every motorcycle exported via the United States to the bloc, so the idea said the idea could move the production of bikes bound for Europe outside the United States.

The company sold about 40,000 brand new motorbikes last year in Europe, equivalent to a sixth of its worldwide sales, generating the region its most important market after its home country.

“Harley-Davidson believes the tremendous cost increase, if passed onto its dealers in addition to retail customers, could have an immediate in addition to lasting detrimental impact to its business inside the region, reducing customer access to Harley-Davidson products in addition to negatively impacting the sustainability of its dealers’ businesses,” the idea said inside the filing.

Harley-Davidson said the increase in tariffs could cost the idea an extra $30 million to $45 million for the rest of 2018. the idea said shifting its production outside the United States could take nine to 18 months. The company said the idea planned to keep prices for European Union customers steady while that will shift was in progress, meaning the idea could absorb any tariff costs. the idea did not say how jobs inside the United States could be affected.

The company, which can be to give more details on the move next month, when the idea reports second-quarter earnings, has been moving some production overseas for years, somewhat eroding its image as an iconic American brand.