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Jun 25 2018

This is what tariffs do.

Harley-Davidson, Blaming E.U. Tariffs, Will Move Some Production Out of U.S.
By Alan Rappeport and Amie Tsang, The New York Times
June 25, 2018

Last week, the European Union hit back against Mr. Trump’s steel and aluminum tariffs with penalties on $3.2 billion worth of American products, including bourbon, orange juice, playing cards and Harley-Davidsons. On Monday, the Wisconsin-based company said that European tariffs on its motorcycles had increased to 31 percent from 6 percent and estimated that would add about $2,200, on average, to every motorcycle exported from the United States to the bloc.

Rather than pass that cost along, the company said it would shift production to its overseas facilities to avoid the European Union tariffs.

“Harley-Davidson believes the tremendous cost increase, if passed on to its dealers and retail customers, would have an immediate and lasting detrimental impact to its business in the region, reducing customer access to Harley-Davidson products and negatively impacting the sustainability of its dealers’ businesses,” the company said in the filing.

Harley’s decision carries huge significance given Mr. Trump’s frequent championing of the Wisconsin company as an American icon and a successful American manufacturer that is creating jobs in the United States. Mr. Trump hosted Harley-Davidson executives at the White House in February 2017, where he called the firm a “true American icon” and thanked it “for building things in America.”

He has publicly criticized other countries, such as India, for imposing tariffs on Harley-Davidson and over the weekend threatened to fire back at any country that throws up “artificial” barriers to American goods.

Harley-Davidson did not specify how many jobs it might shift to its overseas facilities as it ratchets up European production. The company already produces some bikes and parts at facilities in India, Brazil, Australia and Thailand and said the shift should take nine to 18 months to complete. The company sold about 40,000 new motorbikes last year in Europe, equivalent to a sixth of its worldwide sales, making the region its most important market after the United States.

Just what they always do.

I must say I admire the gamesmanship in finding economic pressure points with political targeting only one side is playing.

Some people will get rich while most get poorer and have to pay more for their stuff (classic inflation) which should make them quite angry.

We shall see.