Harley-Davidson Announces Overseas Move, Cites Tariffs

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Production of Harley-Davidson motorcycles sold in Europe will move from US factories to facilities overseas, the Milwaukee-based company announced Monday, a effect of the retaliatory tariffs the European Union is imposing on American exports in an escalating trade war with the Trump administration.

"Surprised that Harley-Davidson, of all companies, would be the first to wave the White Flag", Trump tweeted, adding that he fought hard for them and insisted that "ultimately they will not pay tariffs selling into the European Union".

In 2017, Harley sold almost 40,000 new motorcycles in Europe, which accounted for more than 16 per cent of the company's sales previous year.

Earlier in the day, multiple media outlets reported that Harley-Davidson was increasing the production of its motorcycles at overseas factories as a response to European Union tariffs.

Mr Trump was particularly heartbroken over Harley-Davidson because he held it up as an example of a firm he could help by bringing down trade barriers.

Harley-Davidson bikes are lined up at a bike fair in Hamburg, Germany, February 24, 2017. The company has warned the president's tariffs on steel and aluminum will drive up raw materials costs.

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"Surprised that Harley-Davidson, of all companies, would be the first to wave the White Flag", Trump tweeted Monday.

The United States says it is imposing the tariffs on steel and metal worldwide in order to protect America's metal industries.

Trump praised Harley-Davidson as an "American icon, one of the greats" and expressed confidence the company would expand USA manufacturing under his administration.

In 2017, Trump welcomed executives and workers from Harley-Davidson to the White House, thanking them for building their vehicles in the United States and assuring them, "I think you're going to even expand".

Harley-Davidson's warning is a huge blow for the Republican President, who says he is safeguarding jobs in the US's industrial hotspots. It estimated that the higher tariffs would add about $2,200 on average to every motorcycle exported from the United States to the bloc, so it said it would move the production of bikes bound for Europe outside the United States. Trump praised Harley-Davidson as an "American icon, one of the greats" and expressed confidence the company would expand USA manufacturing under his administration.

The E.U. had specifically targeted Harley, as well as other familiar American brands like Jack Daniel's, to extract maximum punishment after Trump hit the bloc with the steel and aluminum penalties.

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It had already announced plans to close a plant in Kansas City, Missouri - a decision which workers claimed was due to the opening of a new facility in Thailand.

Wisconsin-based Harley-Davidson said the increased costs from the European Union tariffs were a "substantial" burden and a threat to its global sales, which it has been trying to expand.

It also has production facilities in India, Brazil and Thailand. Shifting production to its non-U.

Shares in Harley-Davidson were down by 4.1 percent to $42.38 (£31.92) shortly after the market opened.

Harley-Davidson will not raise its prices to avert "an immediate and lasting detrimental impact" on sales in Europe, it said.

Additionally, retaliatory tariffs from the EU, Canada, Mexico, and more make it expensive to get finished goods into those markets.

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The conflict took another turn on Monday when Harley Davidson, the iconic USA motorbike manufacturer, announced that it would shift production out of the country to avoid the scuffle between Trump and the EU.

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