Harley Davidson claims new factory in Thailand a result of US withdrawal from the TPP.

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Credit: Pexels (free stock photos)

According to a Bloomberg article published April 24, 2018, Harley Davidson motorcycle maker opted in on building a factory in Thailand after the Trump administration withdrew US participation in the Trans-Pacific Partnership (TPP). In the first publicized impact of the US withdrawal from TPP, Harley Davidson CEO Matt Levatich indicated the factory in Thailand was “necessary to access a very important market”.

Additionally, the impact of leaving the TPP was also felt locally for the 260 US jobs lost due to the closure of the Missouri plant amind slumping sales in the US.

As a counterpoint to the article – the article does specify that Harley Davidson has seen sales decreasing in 13 of the last 14 quarters. If accurate, the sales declines started long before the TPP was even discussed and long before the US withdrew from participating in the TPP.

It is further important to note that correlation does not mean causality as Harley Davidson sales in the Asia Pacific region were 32,258 in 2015; 32,889 in 2016 and decreased to 30,348 in 2017. Sales decline of Harley Davidson in Asia occurred well before the US withdrew from the TPP.

I believe the US withdraw from participation in the TPP was used by the CEO to justify two unpopular moves – the building of a factory in Thailand and a closure of the Missouri plant.

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