Harley-Davidson is moving some of its production outside of the United States to avoid the impact of steep new European Union tariffs targeting American-made motorcycles. These EU tariffs came in retaliation for steep tariffs that the Trump administration has imposed on the EU.
Why did the EU impose these tariffs?
On March 1, President Donald Trump announced that the U.S. would be imposing steep tariffs on all imports of steel and aluminum into the United States. His administration initially gave exemptions to a small group of allies, including the European Union. However, on May 31 the White House announced that those exemptions would be ending at the end of the day.
In response, the EU hit the U.S. with tariffs on $3.2 billion worth of American products, including motorcycles. Other products targeted include peanut butter, orange juice, bourbon, blue jeans, and cigarettes. The tariff on motorcycles rose from an initial 6 percent to 31 percent.
The EU said that if the U.S. retaliates, it's prepared to slap additional tariffs on 160 U.S. products worth roughly $4.3 billion.
What is Harley-Davidson doing?
Harley-Davidson is an American company originally founded in Milwaukee, Wisconsin, by two friends working out of a backyard. The story of William Harley and Arthur Davidson's brainchild turning into one of the most well-known motorcycle companies is a quintessential example of the American dream. But now that dream is leaving America (at least, partly).
After the EU hit motorcycle imports from the U.S. with a 31 percent tariff, Harley-Davidson decided that its best move was to move production outside of the U.S. to avoid the tariff altogether. The company said that it would not raise the cost of its bikes, but that the increased tariffs would cost it between $30 million and $45 million.
In an official statement, Harley-Davidson said that it “maintains a strong commitment to U.S.-based manufacturing,” adding:
Increasing international production to alleviate the EU tariff burden is not the company's preference, but represents the only sustainable option to make its motorcycles accessible to customers in the EU and maintain a viable business in Europe. Europe is a critical market for Harley-Davidson.
On Friday, Trump tweeted the if the EU did not remove "tariffs and barriers" that he would hit the trading bloc with a 20 percent tariff on car imports. If he followed through, this would presumably trigger the additional $4.3 million in tariffs threatened by the EU.