Trump Threatens Harley-Davidson With Taxes as Motorcycle Production Shifts Overseas

Trump Threatens Harley-Davidson With Taxes as Motorcycle Production Shifts Overseas

President Trump lashed out at one of his favorite American manufacturers on Tuesday, criticizing Harley-Davidson over its plans to move some of its motorcycle production abroad and threatening it with steep punitive taxes.

In a series of tweets on Tuesday, the president accused the Wisconsin-based company of surrendering in Mr. Trump’s trade war with Europe and said the firm would lose its “aura” if it produced bikes overseas.

“If they move, watch, it will be the beginning of the end — they surrendered, they quit!” he wrote. “The Aura will be gone and they will be taxed like never before!”

The attack came a day after Harley-Davidson announced that it would move some of its production abroad in response to stiff retaliatory tariffs that the European Union imposed in response to Mr. Trump’s trade measures. Rather than raise prices to cover the new 31 percent tariff on bikes it exports to the European Union, Harley said it would shift some of its production to overseas facilities to avoid the tariffs.

Europe targeted Harley-Davidson, an iconic American brand, after Mr. Trump imposed tariffs on foreign steel and aluminum.

[Read more about Harley-Davidson’s decision to avoid European tariffs by moving some production overseas.]

On Tuesday, Mr. Trump accused Harley of using the trade dispute as an excuse to send offshore more jobs following the recent construction of a plant in Thailand. The suggestion echoed the sentiment expressed by one of the unions that represents Harley workers.

Harley’s Thai plant was developed to mitigate tariffs that are already in place in Asia. But the decision to move more production abroad came in direct response to new European tariffs that were imposed to punish American products from politically important states, like Wisconsin. Harley has not said where it will build the bikes for the European market or how many lost jobs in the United States might occur as a result.

Mr. Trump, who has hosted Harley-Davidson executives at the White House and lauded the company as an engine of American growth, said that Harley workers and customers were “very angry.”

Mr. Trump also revived a threat that he used to lob at companies when he was a presidential candidate, warning Harley that they would pay a financial price for moving manufacturing abroad.

“Harley must know that they won’t be able to sell back into U.S. without paying a big tax!” the president said.

[Harley-Davidson’s announcement revealed the uncomfortable choices companies face as they navigate escalating trade tensions.]

The suggestion appeared to misunderstand — or misconstrue — the fact that Harley would be using its overseas production facilities to sell motorcycles in Europe, not back into the United States.

The public attack by the president on Harley is likely to further frustrate Republicans, who have been increasingly worried about the fallout from Mr. Trump’s trade war.

Speaker Paul D. Ryan, the Republican from Harley’s home state of Wisconsin, said on Monday that the company’s move was a sign that unilateral tariffs do not work.

And Senator Ben Sasse, a Nebraska Republican who is a frequent critic of Mr. Trump, defended Harley’s patriotism and condemned Mr. Trump’s trade policies as bad economics.

“This will go over like a Vespa at Sturgis,” Mr. Sasse said. “The problem isn’t that Harley is unpatriotic — it’s that tariffs are stupid.”

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