Why Harley-Davidson Is Moving Some Production Plants Overseas

Rows of Harley-Davidson motorcycles are pictured on June 25, 2018 in the Queens borough of New York City. The iconic motorcycle company announced its plan to shift some of its production overseas as the EU looks to tax products coming from the U.S. Photo: Drew Angerer/Getty Images

By Andrew N. White, International Business Times

Harley-Davidson has revealed plans to shift some of its motorcycle production overseas to avoid the European Union's increased tariffs on American-made imports, the company announced Monday.

The American-made motorcycle company said it looks to produce some of its bikes overseas to dodge retaliatory tariffs set by the EU in response to President Trump's duties on steel and aluminum imported from Europe.

The company currently has production plants in the U.S., Brazil, India, Australia, and Thailand.

"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," the company said in a filing.

On Tuesday, President Trump threatened Harley-Davidson via Twitter that the company will be "taxed like never before" if it moves manufacturing plants overseas.

"A Harley-Davidson should never be built in another country-never! 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!" Trump tweeted.

Trump also claimed that the motorcycle company is using the European retaliatory tariffs as "an excuse" to relocate some of its manufacturing out of the U.S.

"Early this year Harley-Davidson said they would move much of their plant operations in Kansas City to Thailand," Trump said in another tweet. "That was long before Tariffs were announced. Hence, they were just using Tariffs/Trade War as an excuse."

Harley-Davidson said it could lose $100 million a year because of the new EU taxes on specific products shipping from the U.S. The EU’s six percent tariff increased to 31 percent last week after the Trump administration's decision to raise duties on steel and aluminum coming from Europe, according to CNN Money.

Harley-Davidson's stock has decreased more than 25 percent during a 12-month span.

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