Harley to shift some work overseas

Motorcycle maker reacts to the EU’s retaliatory tariffs

Facing higher costs from tariffs, Harley-Davidson said it is shifting production of motorcycles sold to European customers from the United States to another site offshore.

The European Union imposed tariffs on a range of U.S. products in response to similar levies that President Donald Trump put on steel and aluminum from Europe. The EU tariffs will add $2,200 to the cost of an average motorcycle, threatening “an immediate and lasting detrimental impact to its business,” the company said Monday in filing with the Securities and Exchange Commission.

For the rest of this year, the company said the tariffs will add $30 million to $45 million to its expenses. Rather than pass on those costs to consumers in higher prices, Harley said it would absorb them for now while it begins planning to move production offshore. The full-year tariff bill could reach $100 million, the company said.

“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 available to customers in the EU and maintain a viable business in Europe,” the company said.

The news sent the company’s share price down 6 percent Monday in New York. Harley’s decline came amid broader market weakness that saw the Dow Jones industrial average end 328.09 points, or 1.3 percent, lower.

Edward Alden, a senior fellow at the Council on Foreign Relations, said the decision undermined the president’s claim that his “America First” trade stance would benefit manufacturing workers.

“If Trump’s trade policies are leading an iconic company like Harley-Davidson to move production out of the United States, then who exactly is benefiting?” Alden said. “This will pose a real challenge to the president’s core claim that his policies will lead companies to build more things in the U.S.”

The move is among the first signs that Trump’s use of tariffs, which he has promoted as a way to boost employment in the steel and aluminum industries, is hurting other American businesses. Harley’s motorcycles division employs about 5,200 workers. The company provided no details of the number of jobs that would be lost as a result of the production change.