Harley-Davidson said on Monday that it will move production of EU-bound motorcycles out of the US in a bid to combat costs linked to tariffs on various American products.
The EU is Harley-Davidson's second biggest market in terms of revenues outside of the US, reports the Independent of the UK.
The iconic motorcycle maker said the tariffs, which came into effect on June 22 in response to levies imposed by Donald Trump on steel and aluminium exports, had risen from 6.0 per cent to 31 per cent.
This translates into a cost of around $2,200 (£1,700) per motorcycle exported from the US to the EU.
"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," the manufacturer said.
Therefore, Harley-Davidson added, the company will not raise its suggested retail prices or wholesale prices to its dealers to cover the costs of the retaliatory tariffs.
Instead, the company said it would bear the near-term "significant impact" of the tariffs, with the cost for the remainder of 2018 estimated at between $30m and $45m.
On a full-year basis, Harley-Davidson estimates the aggregate impact arising from the EU tariffs to be between $90m and $100m.
The firm said it will shift production of motorcycles for EU destinations from the US to its international facilities to avoid the tariff burden.
The group noted that such a move will require incremental investment and "could take at least nine to 18 months to be fully complete".
In a statement on Monday, the company said: "Harley-Davidson maintains a strong commitment to US-based manufacturing which is valued by riders globally.
"Increasing international production to alleviate the EU tariff burden is not the company's preference, but represents the only sustainable option to make its motorcycles accessible to customers in the EU," it added.
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