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As Trump’s trade war kicks off, Europe celebrates tariff-hit Harley-Davidson

A biker attends the Harley-Davidson 115th anniversary celebration in Prague, on July 5, 2018. (Photo by MARTIN DIVISEK/EPA-EFE/REX/Shutterstock)

BERLIN — All eyes were on Washington and Beijing as President Trump's first real trade war took its first bites on Friday.

But one of the day's most instructive cautionary tales took place in the heart of Europe. The iconic U.S. motorcycle company Harley-Davidson celebrated its 115th birthday Friday in Prague, the capital of the Czech Republic. (A separate birthday event will be held later this year at the company's Milwaukee headquarters.)

The Prague bash — which is expected to bring up to 100,000 fans through Sunday — was planned long before Harley-Davidson became the latest victim of Trump's tariff tumult.

Harley-Davidson announced last week its decision to move some work abroad to escape tariffs on motorcycle imports that the European Union has imposed in response to the president’s earlier tariffs on steel and aluminum. The E.U. tariffs, Harley-Davidson said, would have made motorcycles $2,200 more expensive on average, but there was a way out: to produce them somewhere else.

Europe may only account for about 16 percent of Harley-Davidson sales compared to about 50 percent in the United States, but the company still appears willing to draw the president's ire to defend its slice of the market in countries such as Germany, Britain and France.

China fires back as Trump's trade war becomes reality

This week's Prague celebration indicates where the company hopes to win over new, younger customers within the next few years. Brands like Harley-Davidson have a global marketplace, which was on full display with the Prague bikefest. That reality had run headlong into Trump's America First agenda, showing that U.S. companies are likely to take action if the Trump trade policies begin to hurt their bottom lines.

Harley-Davidson was an extra sting to Trump after he touted its U.S. factories. Writing on Twitter last week, Trump said he was “surprised that Harley-Davidson, of all companies, would be the first to wave the White Flag . . . I fought hard for them.”

This week, Trump doubled down on his comments, directly threatening the company. “Now that Harley-Davidson is moving part of its operation out of the U.S., my Administration is working with other Motor Cycle companies who want to move into the U.S.,” Trump wrote on Twitter. Harley-Davidson did not immediately respond to an emailed request for comment on Friday.

The Harley-Davidson plant in Thailand that President Trump cited will help the company avoid high tariffs. (Video: Reuters)

The president's attacks on their beloved brand were also discussed by some of the tens of thousands of fans who have joined the Prague celebrations since Thursday, according to the Milwaukee Journal Sentinel. While some attendees interviewed by the paper voiced favorable opinions about Trump — for instance, citing disproportionately high tariffs the European Union imposes on U.S. automotive imports — others feared what may yet be to come.

“Some of the decisions Trump’s come up with, I think, are incredibly detrimental to America,” British Harley-Davidson fan Adrian Adrian Percival told the Journal Sentinel. “I think it’s forced companies to start thinking about producing outside of the United States to supply into Europe and the rest of the world.”

In the short run, tariffs may force U.S. brands to move some of their production overseas and result in layoffs among European or Chinese companies directly affected by tariffs.

But in the long run, the measures could cause much more extensive damage to the international economy. Europe now both fears that the U.S. trade war with China may have ripple effect on its economy and that Trump may eventually impose similar measures on the European Union itself.

To some Harley-Davidson fans in Prague, there might be one core advantage to all the drama: their favorite U.S. brand could finally feel a bit more European. The reality, however, is that their motorcycles will now be produced in India, Brazil or Thailand.

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