Harley-Davidson Inc. finds itself caught between a rock and a hard place as President Donald Trump begins a trade war seeking more favorable trade deals for the United States.
In retaliation for Trump’s steel and aluminum tariffs, the European Union increased motorcycle tariffs from 6 to 31 percent. Harley estimated that would add $2,200 to the cost of each motorcycle it sells in Europe, a total annual cost of $100 million. The company decided it did not want to pass that cost on to its customers or its dealers and felt doing so would make it noncompetitive in Europe.
So, Milwaukee-based Harley announced that it would move production of motorcycles for Europe to its overseas facilities to avoid the EU tariffs.
Trump, who met with Harley executives (including chief executive officer Matthew Levatich) at the White House in February, was quick to criticize the company’s reaction to the EU tariffs.
“Surprised that Harley-Davidson, of all companies, would be the first to wave the White Flag,” Trump said on Twitter.
The next day, Trump was back on the topic with several tweets about Harley. In one, he mentioned the company’s decision earlier this year to close a plant in Kansas City.
“That was long before Tariffs were announced. Hence, they were just using Tariffs/Trade War as an excuse,” Trump tweeted.
“A Harley-Davidson should never be built in another country-never!” Trump said in another tweet. “Their employees and customers are already very angry at them. If they move, watch, it will be the beginning of the end – they surrendered, they quit! The Aura will be gone and they will be taxed like never before!”
A few days later, the president was again tweeting about Harley, saying he was in talks with their competitors.
“Now that Harley-Davidson is moving part of its operation out of the U.S., my Administration is working with other Motor Cycle companies who want to move into the U.S.,” the tweet said.
Harley has declined to comment on the president’s statements about the company.
When Trump came to Wisconsin for the Foxconn groundbreaking ceremony, he brought up Harley again.
“Harley-Davidson, please build those beautiful motorcycles in the U.S.A,” Trump said. “Don’t get cute with us.”
The tariffs on steel, aluminum and billions of Chinese goods is a negotiating tactic by Trump, who believes he can play hardball and force other countries to negotiate new trade deals more favorable to the U.S.
“We want to have a fair and balanced situation,” Trump said during his remarks at the Foxconn groundbreaking. “And it doesn’t have to happen immediately, but it has to be fair.”
In his first tweet about Harley’s reaction to the EU tariffs, Trump said, “ultimately they will not pay tariffs selling to the EU…be patient.”
But some businesses have to do what they feel is necessary to weather the storm while this trade war plays out.
