Harley-Davidson to shift some production overseas due to trade war

Harley-Davidson Inc. announced it is shifting production of some of its motorcycles to Europe because of President Donald Trump’s escalating trade war, which critics warn could hamstring the humming U.S. economy and cost jobs.

Trump hosted executives from the Milwaukee-based company and the union officials representing its workers last year at the White House. The president hailed the company as a model of American manufacturing, an industry he promised to restore. He further praised the executives “for building things in America” and predicted the company would expand its operations during his administration.

Things aren’t looking so great for the iconic motorcycle producer this year, however. The company said in a regulatory filing on Monday that retaliatory tariffs imposed on American exports by the European Union rose between 6 percent and 31 percent this year, resulting in a jump in $2,200 per average motorcycle exported to the EU.

But rather than hike prices in the U.S., the company said it would absorb the cost in the short term ― projected to be some $30 million to $45 million through this year― and shift some production to international factories in coming months. 

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NEW YORK, NY - MARCH 1: A trader is comforted by a coworker as they work on the floor of the New York Stock Exchange (NYSE) on March 1, 2018 in New York City. Major stock indexes plunged Thursday afternoon following President Trump's announcement that he was imposing a 25 percent tariff on imported steel and 10 percent on aluminum. Investor concern about the news rattled the Dow Jones industrial average, which closed down more than 400 points. (Photo by Eduardo Munoz Alvarez/Getty Images)
SAN FRANCISCO, CA - MARCH 02: Wine in aluminum cans is displayed on a shelf at Ales Unlimited on March 2, 2018 in San Francisco, California. Beverage companies that use aluminum for canned drinks are concerned that tariffs proposed by US President Donald Trump could result in higher prices for consumers and job cuts across the industry. (Photo by Justin Sullivan/Getty Images)
U.S. President Donald Trump announces that the United States will impose tariffs of 25 percent on steel imports and 10 percent on imported aluminum during a meeting at the White House in Washington, U.S., March 1, 2018. REUTERS/Kevin Lamarque
Members of trade unions hold a protest against US President Donal Trump's import surcharge on Brazilian steel and in defense of their employment, outside the US Consulate in Sao Paulo, Brazil, on March 5, 2018. Since announcing last week plans to impose a 25 percent tariff on steel imports and 10 percent on aluminium, Trump has shrugged off threats from many nations, including China, Canada, Brazil and Mexico among others. / AFP PHOTO / Miguel SCHINCARIOL (Photo credit should read MIGUEL SCHINCARIOL/AFP/Getty Images)
SAN FRANCISCO, CA - MARCH 02: Beer in aluminum cans is displayed on a shelf at Ales Unlimited on March 2, 2018 in San Francisco, California. Beverage companies that use aluminum for canned drinks are concerned that tariffs proposed by US President Donald Trump could result in higher prices for consumers and job cuts across the industry. (Photo by Justin Sullivan/Getty Images)
White House Chief of Staff John Kelly and press secretary Sarah Sanders listen as U.S. President Donald Trump announces that the United States will impose tariffs of 25 percent on steel imports and 10 percent on imported aluminum during a meeting at the White House in Washington, U.S., March 1, 2018. REUTERS/Kevin Lamarque
NEW YORK, NY - MARCH 1: Traders work on the floor of the New York Stock Exchange (NYSE) on March 1, 2018 in New York City. Major stock indexes plunged Thursday afternoon following President Trump's announcement that he was imposing a 25 percent tariff on imported steel and 10 percent on aluminum. Investor concern about the news rattled the Dow Jones industrial average, which closed down more than 400 points. (Photo by Eduardo Munoz Alvarez/Getty Images)
Members of trade unions hold a protest against US President Donal Trump's import surcharge on Brazilian steel and in defense of their employment, outside the US Consulate in Sao Paulo, Brazil, on March 5, 2018. Since announcing last week plans to impose a 25 percent tariff on steel imports and 10 percent on aluminium, Trump has shrugged off threats from many nations, including China, Canada, Brazil and Mexico among others. / AFP PHOTO / Miguel SCHINCARIOL (Photo credit should read MIGUEL SCHINCARIOL/AFP/Getty Images)
Chairman, CEO and president of Nucor John Ferriola and U.S. Steel CEO Dave Burritt flank U.S. President Donald Trump as he announces that the United States will impose tariffs of 25 percent on steel imports and 10 percent on imported aluminum during a meeting at the White House in Washington, U.S., March 1, 2018. REUTERS/Kevin Lamarque
NEW YORK, NY - MARCH 1: A trader works on the floor of the New York Stock Exchange (NYSE) on March 1, 2018 in New York City. Major stock indexes plunged Thursday afternoon following President Trump's announcement that he was imposing a 25 percent tariff on imported steel and 10 percent on aluminum. Investor concern about the news rattled the Dow Jones industrial average, which closed down more than 400 points. (Photo by Eduardo Munoz Alvarez/Getty Images)
SAN FRANCISCO, CA - MARCH 02: Wine in aluminum cans is displayed on a shelf at Ales Unlimited on March 2, 2018 in San Francisco, California. Beverage companies that use aluminum for canned drinks are concerned that tariffs proposed by US President Donald Trump could result in higher prices for consumers and job cuts across the industry. (Photo by Justin Sullivan/Getty Images)
NEW YORK, NY - MARCH 1: Traders work on the floor of the New York Stock Exchange (NYSE) on March 1, 2018 in New York City. Major stock indexes plunged Thursday afternoon following President Trump's announcement that he was imposing a 25 percent tariff on imported steel and 10 percent on aluminum. Investor concern about the news rattled the Dow Jones industrial average, which closed down more than 400 points. (Photo by Eduardo Munoz Alvarez/Getty Images)
Pacific Coast Producers president and CEO Dan Vincent stands in his cooperative's distribution center in Lodi, California, U.S., April 27, 2018. Picture taken April 27, 2018. To match Insight USA-TRUMP/TARIFFS-CANS REUTERS/Noah Berger
An employee uses a crane as he prepares to move a steel pipe at the SAW Pipe Mills, operated by Liberty Commodities Ltd., in Hartlepool, U.K., on Thursday, June 14, 2018. Steel and aluminum�tariffs�imposed by the U.S. in March may already be filtering through to prices charged by American producers of the metals. Photographer: Chris Ratcliffe/Bloomberg via Getty Images
An employee passes a stack of steel pipes at the SAW Pipe Mills, operated by Liberty Commodities Ltd., in Hartlepool, U.K., on Thursday, June 14, 2018. Steel and aluminum�tariffs�imposed by the U.S. in March may already be filtering through to prices charged by American producers of the metals. Photographer: Chris Ratcliffe/Bloomberg via Getty Images
A steel pipe enters a cleaning machine at the SAW Pipe Mills, operated by Liberty Commodities Ltd., in Hartlepool, U.K., on Thursday, June 14, 2018. Steel and aluminum�tariffs�imposed by the U.S. in March may already be filtering through to prices charged by American producers of the metals. Photographer: Chris Ratcliffe/Bloomberg via Getty Images
Identification stencils hang above steel pipes at the SAW Pipe Mills, operated by Liberty Commodities Ltd., in Hartlepool, U.K., on Thursday, June 14, 2018. Steel and aluminum�tariffs�imposed by the U.S. in March may already be filtering through to prices charged by American producers of the metals. Photographer: Chris Ratcliffe/Bloomberg via Getty Images
Sheet steel sits stacked in the store room at the SAW Pipe Mills, operated by Liberty Commodities Ltd., in Hartlepool, U.K., on Thursday, June 14, 2018. Steel and aluminum�tariffs�imposed by the U.S. in March may already be filtering through to prices charged by American producers of the metals. Photographer: Chris Ratcliffe/Bloomberg via Getty Images
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“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. Europe is a critical market for Harley-Davidson,” the company said in a statement.

The move follows a round of layoffs at the company’s manufacturing plants in Milwaukee and Kansas City, Missouri, last year, costing 180 manufacturing jobs.

Trump on Friday further threatened to escalate a trade war with Europe by imposing a 20 percent tariff on all U.S. imports of EU-assembled cars.

Republican leaders in Congress have so far resisted challenging Trump on trade, worrying that an intraparty clash could harm the party in November’s midterm elections. But there are signs that some members of the president’s party ― which historically has favored free trade ― may finally be reaching a breaking point. 

Sen. Jeff Flake (R-Ariz.), for example, warned over the weekend that he’s prepared to oppose Trump’s judicial nominees unless the Senate votes on legislation curtailing the president’s power to unilaterally impose tariffs on other countries.

“I think myself and a number of senators, at least a few of us, will stand up and say, ‘Let’s not move any more judges until we get a vote, for example, on tariffs,’” Flake, who is retiring this year, said on ABC’s “This Week.”

  • This article originally appeared on HuffPost.
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