‘Protectionist’ Trump left embarrassed as Harley-Davidson moves some production outside US

He had "fought" for them but was left stunned by their decision to move some of their production out of the US to evade tariffs imposed by the European Union (EU).

US President Donald Trump on Monday, May 25, tweeted expressing his surprise by motor-cycle giant Harley Davidson's decision to move its production partially overseas to escape the adverse impacts of the trade war that the US is currently waging with the rest of the world.

Trump said he was surprised to see Harley-Davidson as the first company to "wave the White Flag" and rued that the two-wheeler makers will not pay tariffs selling their products to the EU, costing the American economy $151 billion. He said the issue of taxes was just an excuse shown by Harley.

Trump had in the past praised Harley for "building things in America" and also criticised country like India for giving "nothing" back to the US even by slashing customs duty on the imported motorcycles to 50 per cent. The American president also criticised other manufacturers for shifting their production offshore.

But Harley Davidson's decision to move out production has been a shocking consequence of the Trump administration's quest to protect American jobs by imposing high tariffs on imports from other countries and regions, even from those that have been Washington's close allies.

The countries and entities that the US targeted have also retaliated by imposing counter tariffs and that has affected American manufacturers. For instance, the EU's decision to slap tariffs on more than $3 billion worth of American goods, including motorcycles, has affected Harley's business thoughts.

Harley said on Monday that the retaliatory duties on motorcycles imported from the US were hiked from six to 31 per cent, adding that while it still doesn't plan to increase the retail and wholesale prices, it expects an incremental cost of $2,200 per vehicle exported to the EU from the US,

Harley said it could avoid the burden of tariff by moving some of its production to overseas facilities. Last year, it sold nearly 40,000 motorcycles in Europe which it said is its biggest market outside the US.

The EU's retaliatory tariffs lessened Harley's profits from five to eight per cent in 2018, a CNBC report said.