In response to the European Union’s recent tariffs levied on a slew of American-made products, Harley-Davidson Inc. intends to move production of its motorcycles bound for Europe out of the United States, the company said Monday.
“Expanding international production to alleviate the EU tariff burden is not our preference, but it’s the only sustainable option we have to make motorcycles available and affordable to EU customers,” Harley spokesman Michael Pflughoeft said.
The tariffs from the EU, Harley’s second-biggest market behind the U.S., are a response to tariffs the Trump administration implemented this spring on steel and aluminum from producers in Europe and elsewhere.
In planning its retaliation, the EU opted to tax iconic American products including Harleys, orange juice, Levi’s jeans and Kentucky bourbon.
Harley-Davidson said it expects costs related to the tariffs to reach up to $45 million for the rest of 2018 and about $90 million to $100 million annually thereafter.
“This will make their manufacturing less efficient.,” said Sharon Zackfia, an analyst for William Blair & Co. “It’s just another headache for Harley.”