In response to unfair European Union tariffs on its motorcycles, Harley-Davidson says it will move some production out of the United States to avoid the stiff fees. But, a huge portion of their production is already on foreign soil.
“Harley-Davidson maintains a strong commitment to U.S.-based manufacturing which is valued by riders globally,” the company said. “Increasing international production to alleviate the EU tariff burden is not the company’s preference, but represents the only sustainable option to make its motorcycles accessible to customers in the EU and maintain a viable business in Europe.”
The EU is raising the duty on Harleys to 31% from the current 6% level.
While blaming the tariffs for the move is new, Harley-Davidson’s plans to move production out of the United States is not. The company has said that it wanted to move more production out of the U.S. to reduce labor costs. With assembly plants in Thailand, India and Brazil, Harley-Davidson may already be set to make more bikes elsewhere. But how American is a Harley nowadays?
While Harleys bought in the U.S. are assembled here, their parts come from all over the world. The wheels on many Harleys come from Australia and the bikes’ Showa suspension comes from Japan. Harleys also contain parts made in Germany, Italy, Taiwan, Japan and Mexico. We’re not talking just mirrors and seat covers here – major components like engines and transmissions are made outside of the U.S.
According to the Harley-Davidson website, engines and transmissions are assembled in Wisconsin and Missouri, but the site doesn’t discuss where the powertrain components are made.
Final assembly of the bikes is listed as happening in Wisconsin and Pennsylvania except for street models being sold in Asia, Brazil, India, Italy, Spain and Portugal. Final assembly for Brazil happens in Manaus, Brazil while a new Thailand plant builds bikes for sale in Asia. Street bikes sold in India and many EU countries are assembled in Bawal, India. Bawal is likely where the remainder of EU production will be moved.
So Harley saying that it will move production out of the U.S. due to EU tariffs is technically true, but this is a move Harley has been making for years and is likely thankful to the EU for giving them an excuse to move more American jobs overseas – a decision the president thought they made too soon.
“Surprised that Harley-Davidson, of all companies, would be the first to wave the White Flag,” the president tweeted. “I fought hard for them and ultimately they will not pay tariffs selling into the E.U., which has hurt us badly on trade, down $151 Billion. Taxes just a Harley excuse – be patient! #MAGA”
Surprised that Harley-Davidson, of all companies, would be the first to wave the White Flag. I fought hard for them and ultimately they will not pay tariffs selling into the E.U., which has hurt us badly on trade, down $151 Billion. Taxes just a Harley excuse – be patient! #MAGA
— Donald J. Trump (@realDonaldTrump) June 25, 2018
Editor’s note: This post was updated to add the president’s tweet.