Trump threatens Harley-Davidson with taxes ‘like never before’

US president lashes out after motorcycle company decides to relocate production

Harley-Davidson announced on Monday that it is to move some production out of the US to avoid new EU tariffs on its product. Photograph: Reuters/Fabian Bimmer

Harley-Davidson announced on Monday that it is to move some production out of the US to avoid new EU tariffs on its product. Photograph: Reuters/Fabian Bimmer

 

US president Donald Trump hit out at Harley-Davidson on Tuesday, warning that the motorcycle company could be taxed “like never before” as a result of its decision to move production outside the US.

In a flurry of early-morning tweets, Mr Trump lashed out at the company’s announcement on Monday that it is to move some production out of the United States to avoid new EU tariffs on its products.

“A Harley-Davidson should never be built in another country – never!” he tweeted. “Their employees and customers are already very angry at them. If they move, watch, it will be the beginning of the end – they surrendered, they quit!” adding that they will be taxed “like never before”.

In a separate tweet Mr Trump said the company was using the tariffs as an “excuse” as officials had previously told him they were moving plant operations in Kansas city to Thailand before the tariffs were announced.

In January, Harley-Davidson said it would close a plant in Kansas city due to a sharp drop in US demand for its motorcycles, but said it would consolidate work there into its plant in York, Pennsylvania. The company is setting up an assembly plant in Thailand, a move it announced in May 2017, but that would put together bikes only for the growing southeast Asian market.

‘American icon’

Mr Trump welcomed Harley-Davidson executives to the White House shortly after his election last year, lauding the company as an “American icon”. His tweets on Tuesday could be designed to damage the company’s brand among its US customers, many of whom voted for him in the 2016 election.

“I think that the people who ride Harleys are not happy with Harley-Davidsons,” the president said later ahead of a meeting with Republicans in the White House.

The president also reiterated his threat of last week to slap tariffs on car imports from the EU. “We are finishing our study of tariffs on cars from the EU in that they have long taken advantage of the US in the form of trade barriers and tariffs,” he said on Twitter. “In the end, it will all even out – and it won’t take very long!”

He repeated the threat at the afternoon White House meeting. Defending his trade practices, which critics have argued may hurt American workers and consumers, Mr Trump said that trade talks were going extremely well. “These countries that have been ripping us for years, they want to negotiate so badly you’ve no idea,” he said.

Any move to tax car imports would quickly escalate the burgeoning trade war between the US and the EU and would hit Germany in particular.

Republican split

Whiskey maker Jack Daniels also announced on Tuesday that it would increase the price of its products in Europe as a result of the EU tariffs. The Kentucky-based company, which is owned by Brown-Forman, said customers could expect to see a 10 per cent increase in the price of an average bottle of bourbon. About a quarter of the company’s revenues come from Europe.

Several Republicans appeared to break with Mr Trump’s stance on trade.

House speaker Paul Ryan, whose home state of Wisconsin is the headquarters of Harley-Davidson, characterised Mr Trump’s tariffs as taxes, which could undo the benefits of the tax cuts agreed by congress earlier this year.

“One of the reasons we did tax reform was to make it easier for businesses to keep manufacturing in America and export overseas,” he said at his weekly press conference.

“There are unfair trading practices, no two ways about it, by other countries. I think it’s in our interest to use other tools to go after those unfair trading practices, to stop other countries from dumping, from cheating, from stealing … but I think there are better tools than tariffs.”