Iconic motorcycle maker Harley Davidson has decided to shift some of its production from the U.S. into international facilities. Reason: EU tariffs. EU has decided to slap 25% tariff rate on several goods it imports from the U.S. – as a retaliatory move against the U.S. government’s imports tariffs on European steel and aluminum. Harley Davidson has estimated the tariffs to bump up costs by $2200 per average motorcycle exported from the US to EU. Seemingly unwilling to pass this cost to dealers and retail consumers, the motorcycle behemoth is considering moving some of its production away from the U.S.
As it is, Harley Davidson has been trying to revive sales following a closure of its Kansas City plant in January as its shipments fell to a six-year low. Motorcycles, in general, are apparently caught in a demographic shift: baby boomers are aging without enough millennials to fill in their place in motorcycle demand. And now with another shoe dropping in the form of the EU tariffs potential threat, it seems the bike maker has one more reason to cut back domestic production – but this time to invest elsewhere.