After the announcement that motorcycle giant Harley-Davidson would be shifting production to the E.U. to circumnavigate the tariff war started by President Trump’s unilateral decision to upend the global trade system, now comes news that another major American motorcycle manufacturer is considering a similar move.
Polaris, the Minnesota-headquartered maker of off-road vehicles and the parent company of iconic motorcycle brands Indian and Victory, revealed yesterday that they are considering moving some motorcycle production from Iowa to Poland to avoid having their European business being decimated by retaliatory tariffs.
The E.U. announced their response to our tariffs in the wake of Trump’s initial shot across their bow in his unprovoked trade war.
A Polaris spokesperson, Jess Rogers, told the Associated Press that while plans are in the preliminary stages, he refused to rule out moving production, as all options remain on the table.
“Nothing is definitive,” Rogers said. “We’re looking at a range of mitigation plans.”
After rival bike manufacturer Harley-Davidson announced its production move to avoid projected losses topping $100 billion dollars with a “b”, President Trump attacked the company for making the most sensible business decision in reaction to his unexpected trade battle.
A Harley-Davidson should never be built in another country-never! 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!
— Donald J. Trump (@realDonaldTrump) June 26, 2018
Trump’s personal threat to raise taxes on Harley-Davidson in retaliation for actions that make his trade strategy look as bad as it truly is must be giving pause to Polaris executives as they seek a solution to the same problem Harley faces.
Earlier this year, Polaris projected that Trump’s trade policies would add around $15 million to its costs this year, but the additional E.U. tariffs will make that number skyrocket.
The Polaris spokeswoman declined to estimate how much more costs would climb, but, Rogers said: “we’re definitely seeing an increase in costs.”
With the automotive and agricultural industries already being severely damaged by Trump’s misguided tariff scheme, it’s just a matter of time before the traditional Republican economic recession begins.
The question remains whether the downturn will begin before the midterm elections and how much of an impact that will have on the results. It may be worth following the trend of stock futures to see how Wall Street analysts are betting before deciding what to do with any investments you may have.
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