Trump Tariffs Just Got A Black Eye From Harley-Davidson

President Donald Trump and Vice President Mike Pence walk together on their way to greet Harley Davidson executives on the South Lawn of the White House

But rather than hike prices in the USA, the company said it would absorb the cost in the short term ― projected to be some $30 million to $45 million through this year― and shift some production to global factories in coming months.

Harley said increasing production at its overseas worldwide plants would require incremental investments and could take at least nine to 18 months.

Harley-Davidson Inc. sold nearly 40,000 motorcycles in the European Union a year ago, its second-largest market after the United States, according to the company.

"Harley-Davidson maintains a strong commitment to USA -based manufacturing which is valued by riders globally", said the company.

Harley-Davidson, the dominant player in the heavyweight U.S. motorcycle market said earlier on Monday it would not pass on any retail or wholesale price increases in the European Union and instead focus on shifting some USA production. Harley-Davidson, facing rising costs from new tariffs, will begin shifting the production of motorcycles heading for Europe from the U.S.to factories overseas.

The Dow fell by more than 300 points on Monday amid growing worries about trade.

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Harley tied its higher costs to a sequence started by Trump, who praised the company as a model American manufacturer during a February 2017 meeting at the White House.

The EU's levies are only the latest blowback Harley has faced from Trump's trade policies.

US President Donald Trump has accused iconic motorcycle brand Harley-Davidson of waving "the white flag" after it disclosed plans to move some of its production overseas.

Mr Trump has also threatened tariffs on foreign cars and auto parts, arguing that firms should make such products in the US.

The United States says it is imposing the tariffs on steel and metal worldwide in order to protect America's metal industries. While Trump is now under significant pressure to relent on such imposed tariffs, it's likely the calls for a reversal will only raise in volume and in number, in the wake of quantifiable job losses linked directly to the president's trade strategies.

"Unfortunately, this confirms my concerns and is a far too predictable outcome of policies that give companies like Harley-Davidson incentives to make their products elsewhere".

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"Reacting to the announcement, US President Donald Trump said he was "surprised" by Harley-Davidson's decision". Its products imported to Europe originally faced a 6 percent tax, but that number has since risen to 31 percent.

For the US, Harley-Davidson production isn't changing: the motorcycles sold in the country will still be made here.

The firm said that if it stayed in the US then it would result in an incremental cost of about 2,200 dollars per motorcycle sold in Europe.

White House press secretary Sarah Sanders also told reporters at a briefing on Monday that the European Union was "attempting to punish United States workers with unfair and discriminatory trade policies". Earlier this year, Harley-Davidson announced it would consolidate its Kansas City, Missouri facility into its existing York, Pennsylvania one. Harley's motorcycles division employs about 5,200 workers.

Setting up production facilities overseas will take between nine and 18 months, the company said.

Follow Harley-Davidson's stock price in real-time here. They are a response to the Trump administration's tariffs on steel and aluminum imports from Europe.

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