Harley-Davidson is waving white flag over trade, says Trump
DONALD Trump lashed out at HarleyDavidson bosses today as the motorcycle maker planned to move production for European customers overseas to avoid retaliatory trade war tariffs.
Trump’s flagship tariff policy was left b a c k- f i r i n g after the company announced it would start making more bikes outside of the US. The embarrassed president responded by taking a swipe at the iconic American firm, accusing it of “waving the white flag”.
The EU has imposed tariffs on a range of American-made goods, including Harley-Davidsons, after Mr Trump slapped extra levies on steel and aluminium imports from EU and other countries. Harley-Davidson, the dominant player in the US motorcycle market, said it would not pass on any retail or wholesale price increases in the EU. Instead, it would focus on shifting some of its US production abroad.
The company’s shares fell nearly six per cent and analysts cut their profit forecasts on concerns about how quickly the company would be able to adapt to the 25 per cent import duties the EU began charging on June 22.
Responding to the blow to his trade policy, Mr Trump hit out on Twitter, saying: “Surprised that Harley-Davidson, of all companies, would be the first to wave the White Flag.
“I fought hard for them and ultimately they will not pay tariffs selling into the EU, which has hurt us badly on trade, down $151 Billion. Taxes just a Harley excuse — be patient!”
But the Wisconsin-based company said the retaliatory duties imposed by the EU would put an incremental cost of about $2,200 (£1,658) per motorcycle exported from the US to the European bloc. It expects the tariffs to result in extra costs of $30 million (£22.6 million) to $45 million (£34 million) for the rest of 2018 and up to to $100 million (£75.4 million) on a full-year basis.
When he took office, MrTrump vowed to make the motorcycle maker “great again” but the company is now counting the costs of his trade policies.
The firm said only a couple of months ago that his metal tariffs would inflate its costs by $15 million (£11.3 million) to $20 million (£15 million) this year, on top of rising raw material prices that it expected at the start of the year.
White House trade and manufacturing adviser Peter Navarro said yesterday: “Remember, they came to us, pointing out that India had a 100 percent tariff on Harley-Davidsons. That’s certainly not fair,” he told CNBC. He added: “We want Harleys made here.”
However, in January, the company announced the closure of a plant in Kansas City after its motorcycle shipments fell to their lowest level in six years. In 2017, Harley sold nearly 40,000 new motorcycles in Europe accounting for more than 16 per cent of the company’s sales. The revenues from EU countries were second only to the US.
Harley said ramping up production overseas could take at least nine to 18 months. It has three assembly plants outside the US — in Brazil, India and Thailand. The company build the Thailand plant after Mr Trump pulled out from the Trans-Pacific Partnership, which would have lowered import tariffs on its bikes in some of the fastestgrowing motorcycle markets in Asia. DONALD Trump and TV host Jimmy Fallon continued their war of words that began when the comedian ruffled the soon-to-be president’s hair on the Tonight show in 2016. On his chat show last night, Fallon said: “The president went after me on Twitter. So, Melania, if you’re watching, I don’t think your anti-bullying campaign is working.” Mr Trump hit back, saying: “The guy screws up my hair… He was so disappointed to find out it was real.” He added: “Everyone used to say my hair is phony… they never say that anymore.”