Donald Trump attacks Harley-Davidson for moving production away from the US

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Harley's motorcycles division employs about 5,200 workers. One of Trump's trade plans included leveraging tariffs against the European Union for steel and aluminum products.

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.

In a regulatory filing, the Milwaukee, Wisconsin-based company said the retaliatory duties would result in an incremental cost of about $2,200 per average motorcycle exported from the United States to the European Union, but did not provide more details on current motorcycle costs.

The company also warned of a potential "significant impact" from retaliatory tariffs after President Donald Trump announced the steel and aluminum tariffs.

To prevent this damage in the short term, Harley have said they will not raise their prices, instead they will bear the financial impact of the tariffs, estimating them to cost between $30 - 45 million (£22 - 33 million) for the remainder of 2018.

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Harley announced Monday that because of the European Union's new tariffs on United States motorcycles -retaliation for Trump's steel and aluminum tariffs - the company was shifting some production to non-US plants. The company operates manufacturing facilities in Brazil, India and Australia, and is beginning production in Thailand this year.

The company sold about 40,000 new motorbikes previous year in Europe, equivalent to a sixth of its worldwide sales, making the region its most important market after its home country. Harley reports it will share more information on this shift in its second-quarter conference call set for 8 a.m. July 24.

In the wake of the sluggish U.S. sales, Harley-Davidson announced in January it would close its Kansas City, Missouri assembly plant and consolidate jobs in York, Pennsylvania. At the high end, the additional cost from the European tariffs would represent a 2 percentage point reduction in Harley's operating profit margin from previous year. The manufacturer says it will move more production outside the USA to avoid tariffs.

The US President was so upset with the American firm he chose to dedicate a whole Twitter rant to it.

Mr Trump was particularly heartbroken over Harley-Davidson because he held it up as an example of a firm he could help by bringing down trade barriers. Setting up production facilities overseas will take between nine and 18 months, the company said.

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A motorcycle is seen at the Harley-Davidson Museum in Milwaukee on August 31, 2013.

Not long ago, President Trump called trade wars "good and easy to win". "President's beloved stock market took another header Monday on news of more restrictions on investment into the USA, and the Dow Jones Industrial Average is now down for 2018". Daimler, the maker of Mercedes-Benz luxury vehicles, warned last week that escalating tension between the U.S. and China will impair earnings from its Alabama sport utility vehicle plant and lower profit this year. The president hosted Harley executive at the White House in 2017 and has repeatedly praised the company as a strong homegrown product.

In response, the European Union hit the USA with tariffs on $3.2 billion worth of American products, including motorcycles.

But companies have warned that retaliatory tariffs could be devastating for business, or lead to higher prices for USA consumers.

Europe represents Harley's No. 2 market, after the United States, with sales past year approaching 40,000 units.

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