Trump responds to Harley-Davidson, says it's waving the 'White Flag' by moving production out of US because of tariffs

Drew Angerer/Getty ImagesPresident Trump with Harley-Davidson CEO Matthew Levatich in 2017.
  • President Donald Trump attacked Harley-Davidson on Twitter on Monday after the company announced it was shifting production out of the US because of Trump’s trade fight with the EU.
  • “Surprised that Harley-Davidson, of all companies, would be the first to wave the White Flag,” Trump said.
  • Trade experts say that Harley’s move is likely the first of many production moves by US companies.

President Donald Trump late on Monday went after iconic American motorcycle company Harley-Davidson after the company announced it was moving some production out of the US.

Harley announced Monday that because of the European Union’s new tariffs on US motorcycles – which came in retaliation for Trump’s steel and aluminium tariffs – the company was shifting some production to non-US plants.

In a tweet later in the day, Trump said he was disappointed with the decision.

“Surprised that Harley-Davidson, of all companies, would be the first to wave the White Flag,” Trump said. “I fought hard for them and ultimately they will not pay tariffs selling into the E.U., which has hurt us badly on trade, down $US151 Billion. Taxes just a Harley excuse – be patient!”

The Harley move represented a slap in the face for Trump. The president had hosted company executives at the White House and repeatedly praised the company for building its motorcycles in America.

According to the company, the EU’s new tariffs will increase the cost of a motorcycle shipped from the US to Europe by $US2,200. To avoid this cost, the company will shift to countries where there are lower or no tariffs. Harley maintains facilities in Australia, Brazil, India, and Thailand.

“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 said in a statement. “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.”

Republicans also used the Harley announcement to take a shot at Trump’s recent trade attacks on the EU, Canada, and Mexico. GOP Sen. Ron Johnson, who represents Harley’s home state of Wisconsin, said the company’s move was evidence the tariffs were a bad idea.

“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,” Johnson said in a statement. “We need to hold China accountable for its trade abuses, but that does not need to come at the expense of American workers and businesses.”

Economists said Harley’s decision to shift production outside of the US is an expected result of Trump’s increased trade restrictions and likely is a sign of things to come.

“I expect many other companies will be forced reluctantly to move production as Harley has done in order to maintain their viability,” Edward Alden, a senior fellow at the Council on Foreign Relations, told Business Insider.

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