Harley Davidson to move production overseas after trade war

The motorcycle producing giant, Harley Davidson will be moving its production overseas after the European Union announced retaliatory tariffs on the United States. In May President Donald Trump announced that the US would impose tariffs on steel and aluminum imports from the European Union, Mexico, and Canada. Steel imports would be taxed 25% and aluminum imports at 10%. This drastically increased the previous tariffs which averaged at 3%.  In retaliation the European Union announced that they would place tariffs on bourbon whiskey, jeans, and motorcycles. This would equate to about $3.2 billion worth of US imports. Harley Davidson chose to move production overseas in the wake of this trade war in order to avoid these tariffs. The tariffs would increase the price of motorcycles sold in Europe by $2,200. The company said in a public filing, “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”. Trump had originally imposed the tariffs as part of his “putting America first” ideology. He believed that America was treated unfairly when it came to trade and to an extent he is correct. The steel industry is marked by “overcapacity” where too many factories are making too much steel. This causes the producing governments to practice unfair trade capacities. However the European Union, Canada and Mexico are not the culprits of over production, it’s China. So Trump’s tariffs were based on a true fact but were poorly executed and have worked to hurt America’s largest trading partners. Ultimately Harley Davidson’s move is significant as it marks that Trump’s tariffs may be detrimental to American businesses in the long run.

Here are some additional stories concerning Harley Davison’s move:

https://www.washingtonpost.com/news/business/wp/2018/06/25/harley-davidson-moves-work-offshore-to-limit-blow-from-trumps-trade-war/?utm_term=.b2e0baf8e7c1

https://www.vox.com/2018/6/25/17501436/harley-davidson-europe-tariffs-trade-war

https://www.foxbusiness.com/markets/harley-davidson-to-take-big-hit-from-eu-tariffs

Here are some stories about Trump’s tariffs in general:

https://www.vox.com/world/2018/5/31/17413172/trump-tariff-steel-aluminum-eu-canada-mexico

https://www.npr.org/2018/06/22/622488352/eu-tariffs-take-effect-retaliating-for-trumps-taxes-on-imported-steel-and-alumin

What do you think, are Trump’s tariffs hurtful or helpful to American businesses? Leave a comment below!

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