Trump 'surprised' by Harley-Davidson move to shift work out of US

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

In a regulatory filing on Monday, Harley-Davidson said each of its motorcycle shipped to the European Union would cost about $2,200 (€1,880) more after the bloc raised its levies on imported USA bikes to 31 percent from 6 percent on June 22.

Harley-Davidson, up against spiraling costs from tariffs, will begin to shift the production of motorcycles headed for Europe from the U.S.to factories overseas.

In February 2017, Trump welcomed Harley-Davidson executives to Washington and viewed a number of the company's motorcycles on the White House South Lawn.

According to Bloomberg, the growing trade war between Europe and the States is costing Harley-a company The Donald held up as a pinnacle of American Manufacturing just a short year ago-upwards of $100 million US dollars a year. Steel would incur a 25-percent tariff, while aluminum imports would see a 10-percent tariff.

A US motorcycle sales slump has deepened since then, spurring Harley's decision in January to close a plant in Kansas City, Missouri, eliminating about 260 jobs.

Harley estimated that ramping up output in worldwide plants for the European Union may take at least nine to 18 months.

Sen. Jeff Flake (R-Ariz.), for example, warned over the weekend that he's prepared to oppose Trump's judicial nominees unless the Senate votes on legislation curtailing the president's power to unilaterally impose tariffs on other countries.

In 2017, Harley sold almost 40,000 new motorcycles in Europe which accounted for more than 16 percent of the company's sales.

Europe is an important market for Harley. From the company's statements, it plans to continue to manufacture parts for motorcycles in the USA and ship them to Thailand for assembly, as it does for facilities in Brazil and India. Shifting manufacturing to the European Union will allow the motorbike maker to avoid that hit-although it will take 9 to 18 months to ramp-up global plants, Harley-Davison says, and in the meantime the company is expecting to lose $30 million to $45 million during the transition.

The EU's retaliation to Trump's steel and aluminum levies will cost about US$2200 per motorcycle shipped to Harley's second-biggest market in the world, the company estimated in a filing on Monday.

Harley shares fell as much as 4.2 per cent and were down 4 per cent to US$42.45 as of 10:35 a.m.in NY.

Harley-Davidson determined that the tariffs would therefore eat up $30 million to $45 million of the current year's profit.

In late April, Harley said Trump's metal tariffs would inflate its costs by an additional $15 million to $20 million this year on top of already rising raw material prices that it expected at the start of the year.

The European Union is taxing a range of imports from the USA in response to President Donald Trump's decision to slap tariffs on European steel and aluminum.

President Trump with Harley-Davidson CEO Matthew Levatich in 2017. With the European Union tariffs applied, the average cost of a bike faces an increase of around $2,200, it's calculated.

European officials last week imposed stiff tariffs on a wide range of USA -made goods sold within the European Union.

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