US trade policy drives Harley Davidson to create EU jobs

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

"Harley-Davidson maintains a strong commitment to US-based manufacturing which is valued by riders globally".

"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", the company said.

White House press secretary Sarah Huckabee Sanders defended Trump's trade policies Monday during a press briefing. But since then the company has been counting the costs of his trade policy.

Reaction to the company's announcement suggested that the EU's strategy of targeting products made in politically-important states in its response to Trump's metals tariffs was succeeding, according to Edward Alden, a senior fellow at the Council on Foreign Relations.

Adding to the difficulty facing the company were steel and aluminum tariffs on the EU, Canada and Mexico finalized by the Trump administration at the start of June.

While Trump denies accountability, blaming Harley Davidson for their decision to move production, Reuters tells a different story, expressing a potential loss for the company of approximately $100 million dollars. Seemingly, this has left Harley-Davidson little option but to shift production elsewhere. In a tweet, he urged Harley-Davidson to "be patient", saying "ultimately they will not pay tariffs selling into the European Union".

Harley-Davidson's warning is a huge blow for the Republican President, who says he is safeguarding jobs in the US's industrial hotspots.

It is not clear where Harley-Davidson will boost production but the impact on jobs in the USA could be severe.

While such a deal might still happen, trade tensions with China are likely to intensify this week as the USA gets set to announce investment restrictions meant to keep key technology out of Beijing's hands. In January, it said it would consolidate its Kansas City, Missouri, plant into its York, Pennsylvania, facility. The list included bourbon from Kentucky, the home state of Senate Majority Leader Mitch McConnell; as well as orange juice, which is made largely in the swing state of Florida; and motorcycles made by Harley-Davidson, headquartered in Wisconsin, the home state of the House Speaker Paul Ryan.

White House press secretary Sarah Sanders blames the European Union for those lost American jobs. Moreover, the European Union is highly unlikely to pursue Harley Davidson specifically.

S. plants will require additional investment overseas and is expected to take nine to 18 months, Harley said.

Harley-Davidson, which has been focused on expanding its overseas sales, said it remained committed to U.S. manufacturing.

The company chose to build the Thailand plant in response to Trump's decision to pull out from the Trans-Pacific Partnership which would have lowered import tariffs on its bikes in some of the fastest-growing motorcycle markets in Asia.

It is worth mentioning that Harley could make the decision to shift production because it had chosen, in 2017, to open a new manufacturing plant in Thailand. The tactic is meant to give USA factories producing those raw materials a better chance, because they'll be competing against importers who now have additional tariff costs.

But that status made the company a target for European Union retaliation along with bourbon and blue jeans.

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