Harley-Davidson slumps after Trump attacks the company for moving jobs overseas

  • Harley-Davidson said Monday it will move the manufacturing of motorcycles bound for Europe outside of the US to avoid new tariffs placed by the European Union.
  • The new tariffs on manufactured goods were placed by the EU in response to President Donald Trump’s taxes on imported steel and aluminium.
  • Harley-Davidson’s stock price sank as much as 2.6% after Trump berated the company on Twitter.
  • Follow HD stock price in real-time here.

Harley-Davidson sank as much as 2.6% Tuesday after President Donald Trump derided the motorcycle maker over its decision to move some assembly work overseas in response to new retaliatory tariffs from the European Union.

“A Harley-Davidson should never be built in another country-never!” Trump tweeted early Tuesday morning following up on a string of tweets about tariffs and trade wars. “Their employees and customers are already very angry at them. If they move, watch, it will be the beginning of the end – they surrendered, they quit!. The Aura will be gone and they will be taxed like never before!”

On Monday, Harley-Davidson said it “will be implementing a plan to shift production of motorcycles for EU destinations from the US to international facilities.” The move comes just as the European Union placed tariffs on certain manufactured goods – including motorcycles – in response to new US taxes on imported metal.

Harley said the European tariffs will have an annual impact of $US90 million to $US100 million going forward, adding about $US2,200 to the cost of each motorcycle, which the company will swallow rather than pass on to consumers.

“Harley-Davidson believes the tremendous cost increase, if passed onto 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 a regulatory filing Tuesday.

“Therefore, Harley-Davidson will not raise its manufacturer’s suggested retail prices or wholesale prices to its dealers to cover the costs of the retaliatory tariffs. In the near-term, the company will bear the significant impact resulting from these tariffs.”

Trump went on to threaten the company with high taxes in retaliation for moving manufacturing jobs overseas.

“Early this year Harley-Davidson said they would move much of their plant operations in Kansas City to Thailand,” Trump tweeted.

“That was long before Tariffs were announced,” he said in a separate tweet. “Hence, they were just using Tariffs/Trade War as an excuse. Shows how unbalanced & unfair trade is…Harley must know that they won’t be able to sell back into U.S. without paying a big tax!”

Harley-Davidson has fallen 20% this year.

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.