June 25 (UPI) -- Harley-Davidson said Monday it will move production of its motorcycles headed for European Union customers outside the United States to avoid a new tariff.
The action comes in response to tariffs the EU imposed on U.S.-made motorcycles.
The tariffs, which took effect Friday, are retaliation for taxes President Donald Trump imposed on EU shipments of steel and aluminum.
In a Securities and Exchange Commission filing, Harley-Davidson said the 31 percent tariff, up from 6 percent, would add about $2,200 to the cost of each motorcycle -- and the impact could reach $100 million per year.
About 16 percent of the Milwaukee-based company's revenue comes from European sales, which reached nearly 40,000 units in 2017. There, it competes with European and Japanese-made motorcycles which are not subject to the new tariff.
"Harley-Davidson believes the tremendous cost increase, if passed onto its dealers and retail customers, would have an immediate and lasting detrimental impact to its business in the region, reducing customer access to Harley-Davidson products and negatively impacting the sustainability of its dealers' businesses," the company said in the filing, adding it won't raise the prices of its products.
The company has assembly plants in the United States, India and Brazil, and will open a new plant in Thailand in the summer. Some motorcycles sold in Italy, Portugal and Spain are made in India.
Trump has regularly pointed to Harley-Davidson as an example of a U.S. business harmed by trade barriers.
Shares of Harley-Davidson fell 3 percent in pre-market trading Monday.