Trump backs boycott of Thai-made Harley-Davidson bikes

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In what is probably a first in US history, an acting president publicly supported calls for a boycott of a US product, and, with that, one of the most iconic brands, Harley-Davidson motorbikes.

Donald Trump in a spontaneous tweet on August 12 endorsed boycott calls by a 180-people-strong fan group called “Bikers for Trump” who said they would not buy Harley bikes anymore if manufacturing moves overseas, including to a new factory in Thailand.

The Wisconsin-based motorcycle manufacturer announced plans earlier this year to move production of motorcycles for the European Union from the US to its overseas facilities, namely to a large new plant in Thailand, to avoid the tariffs imposed by the trading bloc in retaliation for Trump’s duties on steel and aluminium imports. Existing production locations in Brazil and India could also ship bikes to Europe in the future.

The company has been struggling with declining sales for four years in a row. In 2017, some 241,500 bikes have been shipped, around 145,000 within the US. Domestic sales were down by 8.5 per cent and international sales by 3.9 per cent compared to the previous year. On the upside, the company could possibly stomach the boycott of 180 bikers.

But Harley has forecast that the EU import duties for motorbikes – which increased to 31 per cent from six per cent – would cost the company about $30 million to $45 million for the remainder of 2018 and $90 million to $100 million on a full-year basis as it would not be able to fully incorporate higher prices of an average of $2,200 per bike to shoulder at a time of shrinking sales.

Instead, Harley Davidson motorcycles made in Thailand could greatly benefit from an envisaged free trade agreement with the European Union for which negotiations have resumed this year.

The construction of a new plant in Thailand was announced by Harley-Davidson last year after Trump pulled out of the Trans Pacific Partnership trade deal, which would have abolished tariffs on their motorcycles across 40 per cent of the world’s economy.

In January this year, Harley-Davidson announced it would close its Kansas City, Missouri, assembly plant and consolidate US jobs at York, Pennsylvania.

While for observers the move by Harley-Davidson appears to be a conclusive business decisions to keep the company afloat, Trump took it seemingly personally and made it a loyalty issue.

He tweeted that “many” Harley Davidson owners would plan to boycott the company if manufacturing moves overseas.

“A Harley-Davidson should never be built in another country – never!” another Tweet read.

“I’ve done so much for you, and then this,” the president complained.

 

 

 

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Reading Time: 2 minutes

In what is probably a first in US history, an acting president publicly supported calls for a boycott of a US product, and, with that, one of the most iconic brands, Harley-Davidson motorbikes.

Reading Time: 2 minutes

In what is probably a first in US history, an acting president publicly supported calls for a boycott of a US product, and, with that, one of the most iconic brands, Harley-Davidson motorbikes.

Donald Trump in a spontaneous tweet on August 12 endorsed boycott calls by a 180-people-strong fan group called “Bikers for Trump” who said they would not buy Harley bikes anymore if manufacturing moves overseas, including to a new factory in Thailand.

The Wisconsin-based motorcycle manufacturer announced plans earlier this year to move production of motorcycles for the European Union from the US to its overseas facilities, namely to a large new plant in Thailand, to avoid the tariffs imposed by the trading bloc in retaliation for Trump’s duties on steel and aluminium imports. Existing production locations in Brazil and India could also ship bikes to Europe in the future.

The company has been struggling with declining sales for four years in a row. In 2017, some 241,500 bikes have been shipped, around 145,000 within the US. Domestic sales were down by 8.5 per cent and international sales by 3.9 per cent compared to the previous year. On the upside, the company could possibly stomach the boycott of 180 bikers.

But Harley has forecast that the EU import duties for motorbikes – which increased to 31 per cent from six per cent – would cost the company about $30 million to $45 million for the remainder of 2018 and $90 million to $100 million on a full-year basis as it would not be able to fully incorporate higher prices of an average of $2,200 per bike to shoulder at a time of shrinking sales.

Instead, Harley Davidson motorcycles made in Thailand could greatly benefit from an envisaged free trade agreement with the European Union for which negotiations have resumed this year.

The construction of a new plant in Thailand was announced by Harley-Davidson last year after Trump pulled out of the Trans Pacific Partnership trade deal, which would have abolished tariffs on their motorcycles across 40 per cent of the world’s economy.

In January this year, Harley-Davidson announced it would close its Kansas City, Missouri, assembly plant and consolidate US jobs at York, Pennsylvania.

While for observers the move by Harley-Davidson appears to be a conclusive business decisions to keep the company afloat, Trump took it seemingly personally and made it a loyalty issue.

He tweeted that “many” Harley Davidson owners would plan to boycott the company if manufacturing moves overseas.

“A Harley-Davidson should never be built in another country – never!” another Tweet read.

“I’ve done so much for you, and then this,” the president complained.

 

 

 

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