Harley-Davidson move shows US facing 'consequences' of tariffs: European Union

The EU's top trade official today said the decision of Harley-Davidson to shift some manufacturing of its iconic motorcycles overseas, which President Donald Trump criticised, was a natural consequence of a protectionist US trade policy.

"We don't want to punish, but that is the unfortunate consequence, that (US companies) will put pressure on the American administration to say hey, hold on a minute, this is not good for the American economy," EU Trade Commissioner Cecilia Malmstrom told a news briefing.

The iconic motorcycle brand recently announced its plans to shift some of the production overseas against the imposition of steep import tariffs by the European Union, leaving US President Donald Trump "surprised".


The company, in its US Securities and Exchange Commission (SEC) filing on Monday, said that new retaliatory tariffs by the European Union (an increase from six percent to 31 per cent) will result in an incremental cost of approximately USD 2,200 on an average motorcycle exported from the US to the EU.

"To address the substantial cost of this tariff burden long-term, Harley-Davidson will be implementing a plan to shift production of motorcycles for EU destinations from the US to its international facilities to avoid the tariff burden," said the company without indicating to which country it plans to move its production facilities to.

Outside the US, Harley-Davidson has manufacturing facilities in India, Brazil and Australia.

The news has come as a major surprise for Trump, who has been continually raising the issue of high import tariffs on the motorcycle manufacturer elsewhere.

"Surprised that Harley-Davidson, of all companies, would be the first to wave the White Flag," he said on Twitter.



"I fought hard for them and ultimately they will not pay tariffs selling into the EU, which has hurt us badly on trade, down USD 151 billion. Taxes just a Harley excuse - be patient!" Trump tweeted.

Trump's Twitter account has, in fact, been filled with posts on this matter. He also used the occasion to speak against unbalanced and unfair trade, while giving assurances of finding a solution for the same.


Trump further went on say: "We are finishing our study of Tariffs on cars from the E.U. in that they have long taken advantage of the U.S. in the form of Trade Barriers and Tariffs. In the end it will all even out - and it won’t take very long!"