President Donald Trump accused Harley-Davidson of using new tariffs on trade as cover to shift some production abroad as he threatened the motorcycle manufacturer with a "big tax" on bikes imported to the U.S.
"A Harley-Davidson should never be built in another country - never!" Trump tweeted Tuesday. "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! The Aura will be gone and they will be taxed like never before!"
During his first month in office, Trump credited Harley-Davidson workers for having "supported us big league" during the election when he welcomed executives from the company to the White House. But that lovefest ended Monday when the company said in a government filing that it may move some production outside the U.S. in response to European retaliation for the president's tariffs on imported metals.
Trump criticized the move, and that continued Tuesday morning.
"Early this year Harley-Davidson said they would move much of their plant operations in Kansas City to Thailand. That was long before Tariffs were announced. Hence, they were just using Tariffs/Trade War as an excuse. Shows how unbalanced & unfair trade is, but we will fix it," Trump tweeted.
The president followed up by warning the Milwaukee company that goods produced overseas and imported back into the U.S. could be taxed. "Harley must know that they won't be able to sell back into U.S. without paying a big tax!" Trump said in another Twitter posting.
Harley's chief executive, Matt Levatich, said in April that the factory in Thailand was a "Plan B" that the company employed after the U.S. abandoned the 11-country Trans-Pacific Partnership free-trade agreement Trump withdrew from last year. He'd said the company didn't relish the investment, which he also said was needed to maintain access to a key market.
Michael Pflughoeft, a Harley spokesman, said Harleys sold in the U.S. will continue to be made in the U.S., so there would be no motorcycle imports to tax.
The high-profile spat pits the president against one of the best-known manufacturers in Wisconsin, a state of high political importance to Republicans. Trump won the state's 10 electoral votes by a narrow margin of just over 22,000 votes in 2016, and has repeatedly focused his attention on bolstering the state's economy while in office.
Trump is traveling to Wisconsin today to attend the ceremonial groundbreaking of a Foxconn Technology Group factory set to open by 2020 that proponents say could eventually result in 13,000 jobs. State leaders, including Republican Gov. Scott Walker -- who is running for re-election this fall -- offered the LCD display manufacturer up to $3 billion in government assistance for placing the plant in the state.
The early-morning missive from the president marked the second-consecutive day Trump took aim at the motorcycle maker, after the company said in an SEC filing Monday that tariffs enacted by the European Union in response to Trump's penalties on imported steel and aluminum would add as much as $100 million a year to its costs.
"To address the substantial cost of this tariff burden long-term, Harley-Davidson will be implementing a plan to shift production of motorcycles for EU destinations from the U.S. to its international facilities to avoid the tariff burden," the company said.
Harley shares fell about 0.66 percent Tuesday in New York after tumbling 6 percent Monday, the biggest drop in almost five months. The stock is down 18 percent this year.
On Monday, Trump said he was surprised the motorcycle manufacturer "would be the first to wave the White Flag."
"I fought hard for them and ultimately they will not pay tariffs selling into the E.U., which has hurt us badly on trade, down $151 Billion," Trump continued. "Taxes just a Harley excuse - be patient!"
In a subsequent tweet, Trump said the U.S. is managing to get other countries to lower existing tariffs and barriers that he said have been in place for years through bad deals. "We are opening up closed markets and expanding our footprint. They must play fair or they will pay tariffs!" he said in the post.
Tariffs have also forced the hand of the maker of another iconic American brand, Jack Daniel's.
Brown-Forman Corp., which also produces Woodford Reserve and other bourbons, will have to raise prices for its whiskey sold in the European Union after the implementation of a 25 percent tariff, according to spokesman Phil Lynch. The higher prices, which he said would primarily affect Jack Daniel's, would amount to about a 10 percent increase for consumers.
Lynch did not say what effect the expected price increases would have on European sales, noting that "we continue to invest behind the growth of American whiskey in the EU."
Information for this article was contributed by Gabrielle Coppola and Janine Wolf of Bloomberg News.
Business on 06/27/2018