INSIDE GLOBAL TRADE
Policy Brief No. 201838
June 29, 2018
US putting itself under siege with its own walls
Dong Yan, Wang Fang
US President Donald Trump has been wielding his tariff stick and threatening other trade partners with investment restrictions. While he is bragging about the US manufacturing industry and claiming jobs are coming back due to his policies, Harley-Davidson, which is one of the victims of tariff retaliation by the EU, is shifting some production of motorcycles outside the US. The decision made on Monday has dealt a blow to Trump, who has attacked and threatened the iconic motorcycle company. This incident has cast doubt on Trump's unilateral trade policy.
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After the US proposed imposing a 25 percent tariff on steel and aluminum products imported from the EU, the EU decided to impose the same amount of retaliatory tariffs on products imported from the US, including motorcycles, valued at $3 billion.
For Harley-Davidson, this means the tariff on motorcycles exported to the EU will increase from 6 percent to 31 percent. To be specific, the tariff cost of a single motorcycle will increase by about $2,200, which means the tariffs from the EU will make the company's total tariff cost close to $100 million, equivalent to 15 percent of the company's annual profit.
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