Tariffs

Harley-Davidson Will Shift Manufacturing Overseas To Avoid Tariffs

It can do that because it's a global brand, but other businesses aren't as lucky. And workers everywhere stand to lose.

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David Bro/ZUMA Press/Newscom

Harley-Davidson, the iconic American motorcycle brand, will shift some manufacturing overseas in response to the raising of trade barriers on both sides of the Atlantic.

In a filing made Monday with the Securities and Exchange Commission, Wisconsin-based Harley-Davidson disclosed plans to move some of its manufacturing facilities from the Rust Belt to the Old World in the hopes of avoiding higher costs created by new European Union tariffs that target American-made motorcycles, along with other cultural products like whiskey and blue jeans. Those 25 percent tariffs were imposed last week by E.U. officials in response to the Trump administration's decision to place tariffs on steel and aluminum imported from Europe.

The tariffs will increase the cost of a motorcycle exported from the U.S. to the E.U. by about $2,200 per bike, and would cost Harley-Davidson between $90 and $100 million per year, the company told the SEC.

Passing along that cost to consumers would have "an immediate and lasting detrimental impact" to Harley-Davidson's sales in Europe. Shifting manufacturing to the E.U. will allow the motorbike maker to avoid that hit—although it will take 9 to 18 months to ramp-up international plants, Harley-Davison says, and in the meantime the company is expecting to lose $30 million to $45 million during the transition.

It remains to be seen whether Harley-Davidson's decision to shift some manufacturing operations overseas will force layoffs at its American plants in Missouri, Pennsylvania, and Wisconsin. Still, it's worth noting that the company has scaled back its American production lines in recent years in favor of opening a new plant in India, where motorbikes are highly sought, to get around a massive import tariff imposed there. Harley-Davidson has plans to open another facility in Thailand for the same reason.

All of which should be taken as pretty solid evidence that raising barriers to trade will ultimately harm American workers. A business like Harley-Davidson gets hit at both ends, as American tariffs on steel and aluminum imports drive up the cost of raw materials used to build motorcycles and retaliatory EU tariffs make it more difficult to sell their products. To hear President Donald Trump explain it, tariffs should force foreign manufacturers to "build them here," but Harley-Davidson's announcement shows how a trade war will give American businesses a strong incentive to relocate elsewhere.

Of course, Harley-Davidson has the ability to relocate some of it's manufacturing overseas because it's a global brand that sold more than 40,000 motorcycles to European consumers last year. Other firms don't have that choice and won't generate front-page headlines about the pain caused by Trump's trade war.

Few people are talking about businesses like Mid Continent Nail Corporation in Poplar Bluff, Missouri, which announced last week that it would have to lay off 200 workers—about 40 percent of its workforce—before Labor Day due to increased steel prices created by Trump's tariffs. The 25 percent tariff on imported steel makes it impossible for the company to compete with cheaper nails produced in places like China, a company spokeswoman told MissouriNet.com.

The same is true for the 1,500 jobs at three Arkansas-based tire cord manufacturing plants. All three say they will be forced to close their plants unless they can get relief from the Trump administration's steel tariffs.

Those jobs won't be moving overseas. They'll just vanish.

Whether looking at motorcycles, nails, tires, or any of the other steel-consuming industries that employ more than 6.5 million Americans, the story is largely the same. Trump's trade war is hiking production costs and closing off potential export markets. Tariffs aren't saving steel towns, but they are causing serious pain for American manufacturers—the very set of industries that Trump supposedly is trying to help.

"Increasing international production to alleviate the E.U. tariff burden is not the company's preference," Harley-Davidson told the SEC in Monday's filing, "but represents the only sustainable option to make its motorcycles accessible to customers in the EU and maintain a viable business in Europe."

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  1. yes, companies and economies adjust to tariffs. The fact that Harley has a global brand has nothing to do with their ability to move overseas to produce their bikes. Any company that sells its product in Europe or wants to could do the same. The global brand part means they have a need to do so potentially. It has nothing to do with their ability.

    1. A small business that doesn’t have international size or savvy doesn’t have the ability to do this.

      1. Careful, noticing that foreign tariffs can have domestic effects might get you branded a heretic around here.

        1. I’m making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life.

          This is what I do… http://easyjob.club

      2. “A small business that doesn’t have international size or savvy doesn’t have the ability to do this.”

        Defining what a small business first would help.

        If you go by general definitions, small business tends to be less than 250 employees with micro being 6 or less. Those numbers are more or less an average of SBA definitions since for different industries or sectors they use different size criteria (employees in one case, revenues in another and even employees and revenue requirements vary depending on business segment).

        Well, by that measure, the company that I retired from had production in the USA and China, sold products in Europe, South America, Mexico, Canada, and the USA. All with only 110 or so employees.

        We also had two manufacturing plants in the US and several firms assembling some of our products in China.

        Now, 110 employees was when I left, but we had China production and two USA manufacturing locations when the company was as small as 40 people (some of that were sales people that had zero to do with production and we could have just as easily used commissioned sales reps rather than direct employees).

    2. The fact that Harley has a global brand has nothing to do with their ability to move overseas to produce their bikes.

      Ability vs incentives. Tariffs create the incentive.

      Oh, shit. No they don’t. It wasn’t the intention. So it can’t possibly the the result.

      1. The question will be whether or not Trump will have the ability to admit he was wrong on tariffs like GWBush did, and whether or not the retaliatory tariffs will remain in place from the other countries if/when we reduce ours.

        1. (1) Trump will not admit the tariffs are wrong. He will declare victory over some small concession and then end the program. (2) The retaliatory tariffs will indefinitely remain in place and we will never hear another word about them by people who support managed trade

          1. Dude, I had exaggerated when I said that Reasonoids banned me. It is a problem of my own making.

            What I said to you about Wheaties got back to JD, and he’s not happy with me. May have cost me a friendship, and that would suck.

            1. I didn’t say anything to JD. I don’t involve myself in that stuff. Sarc, I’m really sorry.

              1. I originally just posted that to say that I hoped things were turning around with you regarding your situation with your daughter.

              2. I never said you did.
                He’s one of the best people I’ve ever met. To lose him as a friend will hurt.

                1. Damn, Sarc. Sorry to hear about this.

                  1. Email me.

                    1. Or not.

                    2. That’s what I thought.

                    3. What? I e-mailed you

            1. not to be confused with any fake sarcasmics

        2. Ricardo’s Law of Association implies that even if other countries left their tariffs in place, we’d be doing ourselves a favor by abolishing ours unilaterally.

    3. yes, companies and economies adjust to tariffs.

      This is your answer? It’s ok to have government central planning because companies and economies will adjust?

      1. There’s a difference between making a value judgement and analyzing the utility of an action.

        1. So what is your value judgement on Trump’s tariffs?

          1. I’m opposed to all government intervention in the economy. As that includes foreign government, it’s understandable where tariffs become a useful negotiating tool. The push/pull side of trade negotiations is generally being discounted by the anti-tariff commentariat.

            That being said, my main point is that your criticism of john’s point was a non-sequitur.

            1. “I’m opposed to all government intervention in the economy.”

              as was adam smith

    4. I just got paid $6284 working off my workstation this month. Also, on the off chance that you surmise that is cool, my separated from companion has twin little children and made over $9k her first month. It feels so great profiting RE when other individuals need to work for such a great deal less. This is my main thing? howtoearn.club

    5. It has everything to do with their ability. The stuff that Trump is doing re tariffs is nothing more than compounding the problems that smaller companies have faced for a few decades and will do nothing to solve their problems.

      A completely tariff-free environment means nothing in a world where currencies themselves float in response to both market forces and reserve-currency forces and manipulation forces but are linked to nothing at all in the realm of a world that produces/consumes stuff other than money. That nail company isn’t selling stuff to China – and it doesn’t even need to import its inputs. It could be an entirely local company – but it is still denominating its balance sheet in dollars. Which means it could in theory face one sort of competition one day – followed by an entirely different sort/source of competition the next – all based on stuff that is affecting the dollar on the other side of world that you can know nothing about.

      A company has to be big enough to a)understand that it is forced to currency hedge its balance sheet or go out of business at some point and b)deal with the sharks who sell those hedges and manipulate everything about them. From a small biz perspective that is not one whit different than forcing that company to comply with any other coercive regulations emanating from govt. Maybe even worse since at least when govt does that stuff it is very obvious what it is doing and what is going on.

    6. Yes, this article is grossly oversimplified. Companies should move based on overall income tax considerations. Now, it’s true that because US companies, unlike foreign companies in their native country, are taxed on their global income, that it neutralizes the ability for income taxes to enter into the equation. However, if we switched to a territorial taxing system, and say our corporate income tax rate was 5% and India’s was 30%, do you think companies would care if there was a 3% tariff? No, they would still stay here. What companies want is a low overall tax burden, and thus by reference, a smaller government footprint. Companies didn’t reincorporate their domicile to the Netherlands Antilles because of a great government infrastructure there – they did it because of low tax rates.

  2. Big deal, that plant is all robots anyway. And even if there were people there they could all get jobs tomorrow doing literally anything else.

    1. I didn’t expect this from you. Stick to the haikus

      1. It is no big deal
        Low skill robots don’t need jobs
        Low skill people move

        1. Not your best work.

          I miss the haikus by the way.

          1. Making a haiku
            On topic can be tricky
            I will do better

            1. I thought it was a fine haiku. Even if I might disagree with the substance, but I see the point you’re making

              1. I disagree too
                Sarcasm is usually used
                By me and others

              2. Good riddance, sad bikes,
                Harley Davidson, buh bye,
                MAGA, loser cucks!

            2. Metal costs increase
              The EU retaliates
              Harley rides away

              1. Damn. That’s pretty good too. I suggest you and Sparky debate in haikus.

                1. Harley sales are down
                  How much is due to tariffs?
                  We may not know now

                2. Unfortunately I feel like a moron sitting here counting syllables with my fingers.

                  Fingers move around
                  Japanese must be smarter
                  Leo looks the fool

                  1. Wonders about Leo,
                    Just where have those fingers been?
                    Will not shake his hand.

                    1. Unfortunately I feel like a moron sitting here counting syllables with my fingers.

                      I know what you mean
                      I keep doing the same thing
                      Nobody watches

                    2. Chipper joins the fray
                      Good to see you here, my friend
                      Oh, inside your mom

                    3. At last, an answer,
                      As Leo licks his fingers,
                      To who moves mom’s urn.

                    4. * moved

                    5. Trump lowers the boom,
                      Bad ass bikers say,
                      Time to Vroom, Vroom, Vroom

                    6. Dumb

                    7. Condolences, Chip
                      Leo isn’t a necro
                      Must’ve been your wife

                    8. Inanimate are urns
                      For sure a pervert you seek
                      Li’l Crusty’s dusty?

  3. This is a threat to national security!

    Captain America rides a hog, not a Honda.

  4. But I thought foreign tariffs couldn’t do anything to us, let alone hurt us!?

    /sarc

    1. It’s not that foreign tariffs don’t hurt, it’s that compounding that hurt with your own stupid fucking tariffs is fucking stupid. But you know this.

  5. My question now is: Will the lame-duck, douche-bag Speaker of the House from Wisconsin have the temerity to call out Trump for his tariff policies? I’m guessing no.

    1. My question now Is, will Reason also write articles about Trump’s successes, like FCA moving all Ram Truck assembly back to the US.

      Probably not.

      1. How is that a “Trump success”? Fiat Chrysler announced its plans to move Ram Truck production to Sterling Heights back in 2015.
        FCA-UAW Contract Sees Trucks Coming Home, Cars Going to Mexico
        FCA to move Ram to Sterling Heights, Jeep to Mexico

  6. Comments arguing that tariffs WORK because the high Indian tariffs forced jobs to be moved to India in 5,4,3,2…

    1. Or, I dunno, high EU tariffs forcing jobs to be moved to Europe? Nobody could have ever predicted that.

      1. free trade also forced companies to move to other countries also. how can it be both?
        labor prices in US,regulations in US, taxes in the US, thats some of the answers

        1. Well, yeah. Why would you keep making something here, paying higher taxes and wages, with more regulations, and then to cap it off, pay ridiculous tariffs, when you could move elsewhere to make things more cheaply.

          Businesses exist to make money, news at 11.

  7. Slightly off-topic: I’ve been adding “and a scorching case of herpes” to every headline today. Thus far, here are the results:

    “Before Drug Prohibition, There Was the War on Calico and a Scorching Case of Herpes”
    “The Futile War in Afghanistan and a Scorching Case of Herpes”
    “Everyone Has an Opinion About Whether Restaurants Should Serve Trump Staffers and a Scorching Case of Herpes”
    “Reason Brings Home 5 Southern California Journalism Awards and a Scorching Case of Herpes”
    “Harley-Davidson Will Shift Manufacturing Overseas To Avoid Tariffs and a Scorching Case of Herpes”

    1. Turns out “scorching case of herpes” works in every scenario (except real life)

    2. That is not off-topic at all. That is relevant and timely. Thank you.

    3. [adds “Red Tony is fascinated with herpes” under “Citizen X majored in religion” on H&R commenter news feed]

      1. Uh, correction, Red Tony just watched Ferris Bueller last night and found the line about “a scorching case of herpes” hilarious.

        1. It’s good to know that classics are still relevant in the future.

  8. Those jobs won’t be moving overseas. They’ll just vanish.

    How do you figure? That assumes that Chinese manufacturers can simply ramp up production without adding employees. That seems like a stretch. The jobs will be moving. Just not under the umbrella of a US based corporation.

    1. In context “jobs” obviously refers to employment opportunities for Americans.

      1. No, it doesn’t. Jobs “moving” refers to a US company relocating operations to oversees and thus directly providing employment outside of the US. However, jobs will always move when supply is reduced somewhere but demand remains. How many jobs is a function of economies of scale.

    2. Why the fixation on jobs. Jobs are a cost, not a benefit.

      If we just wanted more jobs we could simply ban automation of any sort. Even set maximum size limits on shovels and brooms. Would create tons of jobs. Would make us poorer at the same time.

      A job is a labor input. Labor is a resource like any other. More jobs equals more labor in the product equals more resources used to make that product equals a more expensive product. Especially so when labor it the most expensive input in almost all manufacturing processes.

      1. Because at the end of the day people need to do something for income… Which is why balancing out all of these things (labor costs, materials costs, capital expenditure, employment levels, etc) is key. We’re not at Star Trek TNG replicator levels of technology yet, which may enable the magical world where nobody ever has to do anything. Until then, especially in a capitalist society, one needs something close to full employment. Otherwise people starve, and starving people eventually revolt.

        Hence balancing interests. It’s just how reality works.

        1. So there’s a limited and fixed number of jobs and we’re fighting over whether they’ll be here or over there?

          Because that’s not how reality works.

          1. Don’t be daft. It’s not completely fixed, but it is also not unlimited. There is not an unlimited number of people who can become brain surgeons. Many industries have something close to a fixed demand, at least at any given time and place.

            There is such a thing as quality of employment too. In the USA we have traded middle of the road jobs for more high end and low end jobs. People with high IQs have been able to move up to IT, science, etc. But low IQ people who lost out on saaay working in a factory, which was within their mental capability, have in fact been pushed further down the ladder.

            Now you can argue that any and all of this is great, and it’s fine to just let 100% market oriented stuff go to work, even if it produces many losers… That’s the direction I lean. However one is fucking moron if you don’t realize that the people on the losing end might get pissed. If enough people get pissed enough you have a peasant revolt. Hence intelligent rulers in history managed and tried to balance out different interest groups situations to keep everybody HAPPY ENOUGH to not overthrow the system. This is political reality, like it or not.

  9. How can one write this article and not draw comparisons to the Japanese manufacturing migration to the US due to tariffs? It seems a perfect case study for how tariffs on manufactured goods still (possibly) benefited the economy that implemented the tariffs. It’s undeniable that there are visibly more jobs in the US as a result of those tariffs. Whether that was an optimum allocation of global inputs is a separate, and more challenging, discussion.

    1. +10, I happen to think that it’s not an optimum allocation of inputs, but the argument that the jobs will just vanish is idiotic. At best you could say, a fraction of jobs would go away. But that fraction is hotly debated. And even Paul Krugman, freely admits, the percent is very low. He estimates 2-3% loss of GDP in the event of a full scale trade war. In the current scenario, it’s unlikely any losses would even be detectable.

      This reminds me of the minimum wage debate. Advocates for a minimum wage are almost assuredly wrong. But as long as the minimum wage is lower than the national effective minimum wage (and all the studies are conveniently performed in mean to high wage states) then there’s no conclusive data.

      1. If we’re to see ‘only’ 2-3 percent GDP loss – well, isnt’ that still a loss? Are we not still worse off? So, what are we going to see to compensate for that GDP loss and turn it into a gain?

        Because without a *net increase* in GDP, we’re just cutting off our noses to spite our faces.

        1. That’s in a full trade war with multiple points of escalation. AFAIK, that generally didn’t happen with Japan. The auto tariffs did not lead to additional substantive escalation in trade barriers between Japan and the US. After the manufacturing moved here, it stayed. Even without the tariffs, there are efficiencies to be gained when manufacturing of large goods is geographically close to points of sale (although less so nowadays given huge efficiency gains in shipping).

          And remember here, I’m talking about the EU’s imposition of tariffs. So it’s their economic gain/loss that I’m arguing should be compared with the US gain/loss from the early 80’s. Until there is a full-on trade war between the US and the EU, such tariffs can be advantageous.

          1. And in the end what did we get? We got some car manufacturing jobs here to replace other car manufacturing jobs – pretty close to a net 0 unless you were one of the Americans that moved from an American car job to a Japanese car job – at great expense to the rest of the country.

            Basically, my parents paid a grand or two to save someone else’s job in Detroit and . . . that’s it.

            1. Well, the point is that if those hadn’t been put in, it’s highly likely the Japanese companies WOULD NOT have moved their production here. Resulting in a net negative. So in theory we used tariffs to turn a net negative into a wash, which is an improvement.

              That’s the thing about tariffs, they DO have the direct effects one would assume, at least in some cases where they’re “well thought out” tariffs. Namely reducing imports and making more jobs in the domestic economy. You have to get into “what if” imaging to know whether or not it ended up being a net positive, like what if we’d just lost those jobs, would those people have done something else equally productive? Frankly I think wage data shows that the losses of manufacturing jobs, and the people moving by the millions to worse paying jobs, has probably resulted in a net weakening of the US economy. IMO this is solely because we have one way tariffs, if other countries opened up I think we’d have been fine. But this is still all basically impossible to know for sure since we can’t A/B different alternate history timelines…

              1. The only reason that the Japanese companies not moving production here would have been a ‘net negative’ is because American car companies had been propped up for so long they could no longer compete.

                Essentially they were destroying wealth with every car that was built. So no one wanted to buy their crap and went looking for imports.

                And if we had allowed the American car companies to die, left manufacturing in Japan, WE WOULD HAVE STILL BEEN BETTER OFF because Americans would be getting high quality cars for less than they are being made over here.

                So, we saved a relative handful of jobs for a tiny minority of Americans at great expense to a couple of generations of the rest of the country? That’s not even breaking even.

                1. Not quite how it works chief…

                  The fact is that it is mathematically possible for the countries net worth/GDP to be LOWER in such a situation. Free trade absolutists ignore basic math in looking at this. The whole idea is premised on 100% of people being able to move on to comparable or better employment, which has not actually been the real/observed outcome as 1st world countries deindustrialized. Granted you must look at communal national results to come to this conclusion, numbers like national GDP etc.

                  For instance, if you save only 20% on 1 billion in imports versus making the item here, that 200 million in savings IS NOT enough to make up for the 800 million loss in GDP that is being sent overseas, no matter how well invested. I’m not going to go on any further, but it is possible to have a net negative as a country. Individuals arguably all get something they prefer (better/cheaper product), but it still lowers the national income overall.

    2. “How can one write this article and not draw comparisons to the Japanese manufacturing migration to the US due to tariffs?”

      Reason hates Trump. Do you expect them to look at the big picture and possibly have to admit that his policies are largely successful? If they did, it might poke holes in their assertion that unilaterally dropping all tariffs against an international community that pays very unfairly is a good idea.

      I don’t see that happening.

    3. Again, “more jobs in the US” doesn’t equal “benefited the economy.”

  10. I seem to remember a while back being told in the comments section of a different article that foreign tariffs only hurt the foreign countries that enact them and the US should not attempt to coerce those countries to get rid of them.

    1. Yes, and those of us who laughed then are still laughing.

  11. Die-hard Harley drivers would be shocked if they knew how many parts on their beloved hogs are already being produced overseas.

    1. No they wouldn’t. They’re not stupid just because you’d like to think they are.

      1. First, MP attributes to me something I did not say or imply. Then he attacks me for saying it.

    2. Most die-hard Harley riders are accountants and lawyers. I’m sure they’re keenly aware that their parts are made in China.

      1. Yea verily; and they giveth not the rectum of a rodent.

      2. Die hard HD *riders* are the minority of HD owners. The majority of HD owners are retired dudes who just take them out on Saturday to wash them in the driveway. They’re well-off, but they aren’t accountants and lawyers.

    3. most Die-hard Harley riders are dying off and harley is in a bind and thus moving production to where people think its cool to ride an American icon even though its still shit. do you think harley came up with this idea over night no they’ve been planning this since before the tariff ideas came up.

      1. Just spent a few weeks in Italy. Saw boat loads of Piaggios, Vespas, Peugeots, Hondas, Yamahas, Suzukii, Ducatii and a grand total of one (1) Harley softail at a toll booth on the A11. Wondering how many bikes H-D really thinks it sells in EU land. Best guess is H-D sells one container worth a year and thinks this is a good PR bluff to save every fraction of a percent it can. They have been in trouble for a long time and grasping at straws.

      2. 1. HD’s aren’t shit. They aren’t as great as their advertising says they are but they’re decent enough bikes. You pay extra for the lifestyle branding.

        2. You’re confusing HD’s model and marketing shift with their location of manufacturing shift. Yes, HD is changing lanes to makeup for the fact that their die hard market is dying off. But those new bikes could be made anywhere – even the ones set for the Euro and Indian markets. The location of manufacturing is moving in response to the tariffs. Absent the tariffs then these bikes likely would still be made in the US and shipped as shipping across the world is incredibly inexpensive and a tiny fraction of the final price of the vehicle.

        Labor price and regulatory burden are larger factors in siting a manufactory than distance to customer.

        1. Especially since labor costs in Europe are going to be near the same if not higher than inside the US and the regulatory burden is certainly going to be higher.

  12. The fact that Harley lost 8.5% in sales last year in the US compared to 2016 definitely has absolutely nothing to do with this decision. Nope, nothing at all.

  13. Is the article implying that this will be a negative to American manufacturing and a boon to European manufacturing? Because if it is, then logically this effect would work both ways.

  14. Must be having all-day meetings at the Reason offices today.

    1. KMW: How can we say that business can refuse to serve someone after backing the candidate who was most opposed to freedom of association in the last election?

      ENB: Because Christians are literally Nazis?

      KMW: Ummmm…let’s put a peg in that idea

      Nick: Let me write it.

      KMW: I was thinking that….

      Nick: The Jacket has spoken. The conversation is over.

      KMW: Oh…oh…OK?

      1. You’re now claiming Hillary Clinton was better on freedom of association than Gary Johnson. Right.

        1. Well, her associations through the foundation certainly made her financially free – – – – – – – – –

        2. Hi, Cathy. This is what’s known as a “joke”. I do think there is a case to be made that Johnson, Hillary, and Trump were each equally awful, though

  15. Trump, making Americans appreciate free trade. Reverse psychology MAGA!

    1. You’re not wrong. Prove me wrong. I dare you.

  16. I’m sure the workers will blame the greedy company.

  17. to make adam smith required reading in secondary schools would be blasphemous, chauvinistic, misogynistic, and anti-lgbtq today…hehe.

    1. Your understanding of Smith is he would approve one sided tariffs? He would say this equates as open market? I mean, tear down the damned tariffs but it is either reciprocal or it’s suicide.

      1. When our neighbours prohibit some manufacture of ours, we generally prohibit, not only the same, for that alone would seldom affect them considerably, but some other manufacture of theirs. This may no doubt give encouragement to some particular class of workmen among ourselves, and by excluding some of their rivals, may enable them to raise their price in the home?market. Those workmen, however, who suffered by our neighbours prohibition will not be benefited by ours. On the contrary, they and almost all the other classes of our citizens will thereby be obliged to pay dearer than before for certain goods. Every such law, therefore, imposes a real tax upon the whole country, not in favour of that particular class of workmen who were injured by our neighbours prohibition, but of some other class.

  18. I wouldn’t ride a Harley if you gave one to me….

    Certified POS!

  19. Emotionally driven social issues don’t have much impact on our lives, no one cares whether a movie has too many white people.

    But math don’t care about your feelings, and if trade wars ramp up the economy will suffer.I have a feeling both sides will eventually agree to some face saving concessions. The sooner the better, I hope.

    Is this a big win for Japan and Korea? We have separate deals with them and Trump hasn’t slapped them punitive tariffs. Or at least I don’t think so.

  20. Well, the EU economy will die completely since they imposed a 73% tariff on Chinese steel in 2016. Not to mention the 20% VAT on all imports at least since 2011. Europe is surely in deep shit. Right?

    All done before Trump. If HD just made their decision to move some manufacturing to Europe because of Trump tariff/retaliation then they’re doomed anyway. Plus motorcycle (all brands) sales have been declining for the past few years. Honda is top seller because of engine size options.

    The EU road tax is based on engine size. So, the !200s only sell to the higher income people.

    What will Reason publish when tariffs lower the deficit?

    1. Tariffs can certainly lower the trade deficit – in just that same way the Great Recession did. By slashing consumption & shrinking the economy. I wonder how many people are left the White House who understand that.

  21. Top five tips for those at motorcycle, nail, keg, and other companies who voted for Trump but now are losing their jobs or their businesses:

    1) Perhaps Donald Trump could offer some personal tips on navigating bankruptcy!

    2) You could have, should have chosen an education

    3) One more thing to rail at liberals about!

    4) Maybe some of your black co-workers will get laid off too, so it’s not all bad from your perspective

    5) Eat your Trump hats!

  22. Harley was already planning to close these plants before the Tariffs. They are just trying to justify the closures with this excuse.

  23. Just another sad loser company nobody likes trying to blame their failures on our Lord and Savior. I say good riddance to bad rubbish. MAGA!

  24. Only Trump could run Harley Davidson the symbol of American freedom for many motorcycle riders out of the country… That 2nd term just rode off into the wind….

  25. Good riddance. Perhaps EU/ECE regulatory bureaucracy will SILENCE the hogs. Motorcycles are slow suicide.

    Trump 2020 vision for the future. Unite the Right. Make America Great Again, Safe and Armed Again, Wholesome Again (

  26. Harley has had a strategy of moving production overseas since the 2000’s. In 2009 they started manufacturing bikes in India. I would bet that there were discussions over the years as to where else to move production to.

  27. The thing that sooo many seem to miss is that tariff/trade war stuff comes down to one of two things:

    1. Who blinks first.
    and/or
    2. Who has the upper hand.

    If we had the resolve as a nation to endure a very brief period of potential economic slumping, we could get every economy of importance in the world to drop all tariffs on us. At least the major exporting nations. Why? Because we have the upper hand. We’re the biggest consumer market on earth for most things. We could crash China’s economy tomorrow, and still easily import cheap goods from dozens of other countries. We can replace them, they can’t replace us.

    Which is why they’d blink first if we forced their hand. Trumps strategy on this is pretty flawed.

    IMO he should be going to all the 2nd stringer exporter countries on earth and telling them “Look, we’re going to push China all the way and see if they buckle right off the bat. If they do none of this will matter, but if they don’t immediately we’re going to need to import stuff, I’d like it to be from you. We’re offering 0% across the board if you reciprocate. If you don’t we’re going to slap 100% tariffs on all your goods across the board. You really only have one option (Vietnam, India, Thailand, Colombia, etc), so take it, it’s for the best anyway.”

    1. Fact is many of these smaller countries NEED us too, and we wouldn’t even feel it if any individual country did try to say no anyway. So they’d buckle. After getting them lined up, go after China. They’d buckle knowing we had the upper hand.

      The problem is in our dysfunctional democracy nobody has the political power to follow through on something like this. And apparently a bunch of people who claim to support free trade are too big of pussies to allow us to actually utilize the leverage our economy has to ACTUALLY ACHIEVE FREE TRADE. So it’ll likely never happen. But if we were a dictatorship this could very easily be accomplished because we have the upper hand. How people don’t get the fact that it WOULD be this easy is beyond me.

    2. if we had the resolve as a nation to endure a very brief period of potential economic slumping, we could get every economy of importance in the world to drop all tariffs on us. At least the major exporting nations. Why? Because we have the upper hand. We’re the biggest consumer market on earth for most things. We could crash China’s economy tomorrow, and still easily import cheap goods from dozens of other countries. We can replace them, they can’t replace us.

      The question is ‘why should we endure that period of economic slumping (there’s no ‘potential’ about it, it would trigger a major depression – its not all finished products coming into the US)’? What gain is there to *me*? Why are you asking *me* to take one for the team? Why do I care if another country jacks up the prices their own people pay?

      1. Are you fucking shitting me??? You don’t understand why ACTUAL free trade would benefit everybody in the world, including you as an individual??? LOL

        I’ll try to keep it simple. It depends on whether such a bludgeon would also get rid of subsidizing of domestic industries, which would make it even better. We might be able to pull that off, or at least tone it down, but maybe not. First, actually optimizing the global economy based on true productivity (AKA absolute advantage), this would be huge. The whole world would become wealthier if the market could truly figure out WHO produces things best, not just because country X has a tariff that supports their industry.

        Second, like it or not, every citizen of any country is more tied to the fate of their fellow countrymen than some random person half way around the world. If you neighbor makes more money, that means he pays more taxes, and your taxes can be lower to pay for the same fixed costs of maintaining society.

        Additionally, unless 100% of your income is derived from foreign sources, your neighbor having more money means YOU will make more money. If you own a bar, he has more to spend there. Retail? Ditto. Contractor? Ditto. Down the list. If China/others dropping tariffs meant American companies could export 500 billion a year more in goods, that’s juicing the economy 500 BILLION a year compared to now. That’s more money for everybody to spend/invest etc.

      2. So THAT is how you, and everybody else, benefits from real free trade. I say it’s worth it to bludgeon them for such great long term benefits. You can’t live only in the here and now. If you want to make personal wealth you have to “suffer” by investing, instead of consuming, some of your money now, so you can be better off in the future. Forcing free trade could be a very worthwhile thing to do.

  28. I am disappointed that writer for Reason could not do the simple research to know that this decision has been in the works for a while and has nothing to due with the tariffs. Declining sales is the real reason, though the tariffss allows Harley to shift the blame from their sales to Trump.

    Look up the USA Today article from January 2018.

    “MILWAUKEE ? Harley-Davidson’s sales fell sharply in 2017 and the company will move ahead with a plan to consolidate manufacturing operations, including the closure of its Kansas City, Mo. plant.

    The world’s largest maker of heavyweight motorcycles has struggled to reverse a four-year sales slide, with growth overseas somewhat helping offset a decline in the U.S. bike market.”

    1. The transfer of manufacturing to Europe is not something that has been in the works for a while. God damn, how hard is it to understand that where you make something is practically irrelevant nowadays?

      They certainly have been working on changing their branding and marketing in response to lower sales – but absent the tariffs there would be no reason to move production to another country. On a level playing field you can make bikes to sell in Euroland *cheaper* in the US and ship them over than you can make them in the high regulation, unionized legal environment of the Continent.

      BMW doesn’t make cars in the US for the US market to save production costs, they do it to save *legal* costs. HD is doing the same thing in reverse.

  29. Harley makes most of their profit on gear and apparel.

    1. In part because the H-D motorcycle market is saturated. But even an H-D won’t last forever.

  30. That’s quite a nice response from the Boys in Milwaukee for the import restrictions that saved their bacon during the Reagan Administration.
    Well, I was going to buy a new Indian FTR 1200 anyway.

  31. I can say Run from US is the only option now available.

  32. The entire article is based on the false premise put out by Harley Davidson. This was a decision made long before the tariffs due to declining sales in the US as younger people are not buying expensive motorcycles. They just didn’t want to take the heat for closing a US plant. I believe it is very fair to say Harley put out fake news.

  33. Harley-Davidson will shift manufacturing …

    As I understand it, Harley-Davidson plans to make motorcycles for the European market in Europe to get around the European tariffs proposed for US-made Harley Davidson motorcycles.

    Beretta and H&K established factories in America to make guns for the US market due to US restrictions on imported guns. They kept their factories in Germany and Italy. Sounds to me like a similar solution.

    Now if Trump drops his proposed tariffs in exchange for trade concessions from the European Union, the whole thing could be moot.

  34. The US Government sets the trade policy.

    The Chinese Communist Party sets the trade policy.

    The EU Committees set the trade policy.

    Trump at least wants free trade where the TOP MEN dont decide every facet of trade.

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  35. As far as I know, this is not the first company that wants to move its production to reduce its taxes. In General, I fully understand them, very often the US business is not the best environment. But I hope that this move will not affect the cost and availability of their bikes, because I already bought biker accessories from the site https://bikerringshop.com/collections/accessories and ready for the summer races!

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