Harley-Davidson to shift some production outside US over EU tariffs

25 June 2018, 14:05

Harley Davidson has said it will move some production of motorcycles destined for the EU overseas after Brussels retaliated against President Donald Trump's tariffs.

The Milwaukee-based company said it will not pass on the cost of tariffs to its customers as that would have a lasting detrimental impact to business in the region, which is its second largest market.

Production could be shifted to plants in Brazil, India and Thailand.

In a regulatory filing, Harley Davidson said: "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.

"Harley-Davidson expects ramping-up production in international plants will require incremental investment and could take at least nine to 18 months to be fully complete."

Brussels imposed tariffs on a range of US-made products, including cosmetics, whiskey and cranberry juice. The levy on Harley-Davidson bikes has increased to 31% from 6%, the Milwaukee-based company said.

It believes that works out to be about $2,200 (£1,650) per bike it exports from the US to the EU.

"In the near-term, the company will bear the significant impact resulting from these tariffs, and the company estimates the incremental cost for the remainder of 2018 to be approximately $30 to $45m," Harley-Davidson said.

"On a full-year basis, the company estimates the aggregate annual impact due to the EU tariffs to be approximately $90 to $100m."