Boots & Sabers

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1220, 25 Jun 18

Harley Shifts Production Overseas

This is one of the costs of tariffs.

Harley-Davidson plans to shift some motorcycle production away from the US to avoid the “substantial” burden of European Union tariffs.

Last week, the EU imposed retaliatory tariffs on US goods, including bourbon, orange juice and motorcycles.

The measures are a response to new US duties on steel and aluminium imports.

Wisconsin-based Harley-Davidson said the increased cost from the tariffs threaten its international sales, which it has been trying to expand.

The company has assembly plants in Australia, Brazil, India and Thailand as well as in the US.

It said it would raise investment in its international plants, though it did not say which ones.

“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,” the company said.


1220, 25 June 2018


  1. Pat

    More of Trump making America great. And stock market taking another dump today. It’s time for Americans to take America back from the tyranny of Trump.

  2. Kevin Scheunemann

    I agree with you Pat, Trump’s trade war is stupid.

  3. Merlin

    It is particularly tough for U.S. companies to sell anything to the E.U. without either partnering with a domestic E.U. corporation that produces your product within the E.U. or simply creating a new wholly-owned entity within a E.U. nation. Either way, you have to meet their versions of a domestic corporation and play by their trade rules or you are effectively frozen out of their markets.

    The E.U. is very familiar with the concept behind Trump’s “America 1st” trade policy. They pretty much wrote the gospels on protectionism and are unabashedly devout.


  4. dad29

    They pretty much wrote the gospels on protectionism and are unabashedly devout.

    Yah, well, don’t tell Pat and Kevin.  Also don’t tell them that US tariffs on European imported cars are FAR less than the European tariffs on US cars.

    After all, the US is expected to take its beatings and ask for more, please, sir.  Just like the US is expected to pay for the entire defense burden in Europe, more, please, sir.

    Oh–by the way–how about that Harley closing Kansas City (its newest plant) and moving all that production to SE Asia?  That had NOTHING to do with the tariffs, you recall.

    Here’s the thing:  Harley is blame-shifting.  They can’t compete with Euro bikes such as the BMW and Triumph, the market for heavy bikes is falling like a rock, and so they’ll reduce production and blame it on Trump.

    And some will fall for that.

  5. Merlin

    If Harley is to survive they need to enter the emerging markets in India and Asia. The dilemma there is that both India and China have wickedly protectionist trade policies.

    A Harley exported to India faces a 100% tariff (hence the H-D investment in India-based manufacturing and distribution for the India sales market). China’s tariff is merely 30%, but their non-tariff barriers are fairly draconian. China demands access to U.S. held patents and a U.S. corporations R&D facilities be moved to China.

    Since WW2 the U.S. Congress (both parties, by the way) has been intentionally using lop-sided trade agreements and trade policy as an unofficial means of effectively increasing unbudgeted and off-the-books foreign aid.

  6. dad29

    Foreign Aid.

    Exactly what it is.  Personally, I prefer to take care of my neighbors and fellow countrymen rather than residents of SE Asia.  But that’s just me.

    China demands access to U.S. held patents and a U.S. corporations R&D facilities be moved to China.

    Even then, they’ll steal you blind, as Jeep (then owned by Mercedes) and Briggs/Stratton found out.  Maybe the Briggs union was unpleasant–but giving the Chinese Communists all your technology….ehhhh….no, thanks.

    Should be interesting to see how the Buick Envision does; it’s built in Red China and noplace else.  Wonder if Trump will tariff that thing….

  7. MHMaley

    There is a wide opening for a candidate who understands the failed history of Tariffs and the long term success of free trade .

    The Republican Senator from Pennsylvania (Toomey ) seems to be the only member of the GOP in Congress who is willing to fight Trump tooth and nail on the issue .

    Bernie and Elizabeth side with protectionism and can’t use the issue .

    It’s should come as no surprise the only Dems who actually won the Presidency lately were free traders .

  8. Paul

    Go have a stool softener and sit down, gramps.

  9. dad29

    Nordski, Harley’s sales are dropping like a rock.  Their bleating about “tariffs” is a cover for reducing production–again.

    By the way, your question makes no sense whatsoever.

    Maley is wrong, as usual.  Merlin knows exactly what he’s talking about and he’s right.  What Trump is after is FAIR trade.  FREE trade is a myth; most of us know that “no tariffs” is nice, but currency manipulation is also on the menu.  And after that, Gummint subsidies are next up.

  10. Le Roi du Nord


    You are certainly entitled to your opinion, but that doesn’t change the given reason for H-D moving.  Unless you know what went on in the H-D board room.

  11. Paul

    The only motorized vehicle you need to worry about is your Rascal.

  12. Merlin

    The Schneider article cited is cringeworthy reading from beginning to end. It’s entirety is based upon a false understanding of the business of international commerce and the effects of politics on international commerce. He is particularly clueless regarding the specific economics of Harley Davidson’s woes.

    In the simplest terms possible, H-D cannot survive on domestic sales alone and cannot penetrate foreign markets as a U.S. exporter because of the protectionist barriers erected by foreign governments to protect their own domestic industries. Harley’s investments in foreign manufacturing predate Donald Trump’s presidency by several years and are a reaction to the reality of foreign trade policies. This corporate survival strategy is decades old and the truth of the matter is that H-D may have deployed it too late in their corporate life cycle. It is entirely possible that Harley’s international sales will thrive while their domestic sales and manufacturing continue to die a slow death.

    Free trade and fair trade are only free or fair to the degree that trading partners are willing to agree to through negotiation. What we have now is neither free or fair and while you may have been able to make a compelling argument in the past that the U.S. could afford to underwrite unfair foreign trading practices, we are seeing yet another local example of why this is no longer true.

    Doing nothing is not an option. Polite negotiation will yield nothing more than it has in the past unless our trading partners believe that we are serious about pursuing fairer trade deals by bringing to bear the undisputed fact that the USA is by far the biggest consumer of everything this planet has to offer. Money is the biggest weapon known to man. We have so much of it that foreigners can become wealthy simply by investing in our debt. Think about that for a second.

    Trump is willing to wield our buying power like a club in order to induce our partners to rethink their trade barriers to U.S. exporters like Harley. Our resolve will be tested with minor tit-for-tat rate hikes for a short while, but in both the short and long game nothing talks like money. We have it. They want it. We can support the economic mechanics even if we detest the associated political theatrics.

  13. dad29

    Nordski, Merlin has the correct response.  He’s not the lone ranger.  You can look at Tonelson’s essay of today for more, and if you’re REALLY inquisitive, read all of Tonelson’s blogs….

    When you come down to it, I’d rather see you and your children earning a living than some Chinaman or Brazilian–even if you are a wacked-out Lefty.

  14. jjf

    The Schneider article cited is cringeworthy reading from beginning to end. 

    Well, that’s what I think of him every week. But hey, he’s the paid conservative voice!

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