U.S. president Donald Trump has resorted to something very un-American to take revenge on iconic motorcycle maker Harley-Davidson, Inc for its decision to produce some of its famous road bikes in Europe -- he'll ask Japanese and German motorcycle makers to make more bikes in the USA.
He also threatened to do something unlawful and unconstitutional. He said he'd impose higher taxes only targeted at Harley after the firm said it would move some production for motorcycles to be exported to the European Union (EU) to avoid EU tariffs. Harley said the new EU taxes, which are a response to Trump's hefty tariffs on aluminum and steel, will increase the average price of its motorcycles sold in the EU by some $2,200.
"Now that Harley-Davidson is moving part of its operation out of the U.S., my Administration is working with other Motor Cycle companies who want to move into the U.S," tweeted Trump.
The lawlessness of his actions seemingly isn't apparent to Trump. Begging foreign companies to do business in the USA violates his pledge to boost homegrown American businesses like Harley. It will also make foreign firms rich at the expense of their American competitors. And threatening to impose taxes on a specific company is patently unlawful. It's just not done.
Among the foreign motorcycle makers that are out, there are Germany's BMW; Italy's Ducati and Japan's Honda, Yamaha, and Suzuki. It's hard to see why BMW and Ducati would want to produce their high-end bikes in the U.S. given the trade animosities between the EU and the U.S. triggered by Trump's protectionism. And the Japanese don't sell a lot of heavy road bikes in the USA.
The petulant president launched a wave of angry tweets against Harley after the company said on June 25 that Trump's tariffs and the retaliatory tariffs from the EU make it impossible for them to do business profitably.
Harley was praised by Trump last year as a great example of a homegrown brand that became world famous because it was made in the USA. Trump reacted to Harley's relocation announcement with fury, saying the firm insulted him by waving the white flag of surrender. Harley, however, said it has valid business reasons for moving to Europe.
"To address the substantial cost of this tariff burden long-term, Harley-Davidson will be implementing a plan to shift production of motorcycles for EU destinations from the US to its international facilities to avoid the tariff burden," said the company in a regulatory filing. "Harley-Davidson expects ramping-up production in international plants will require incremental investment and could take at least nine to 18 months to be fully complete."
Harley said Trump's tariffs will see its expenses jump by $15 million to $20 million this year. It also expects Trump's tariffs to add incremental costs of $30 million to $45 million for the rest of 2018. This cost will balloon to $80 million to $100 million for the full-year.
