SPIRIT LAKE, Iowa -- Retaliatory tariffs the European Union is imposing on American products has Polaris Industries Inc. looking to send some production of its Indian Motorcycles to Poland, according to a published report.
The Twin Cities-based power sports manufacturer moved the Indian production to Spirit Lake, Iowa, after acquiring the iconic brand in 2011. The plant, one of the largest employers in the Iowa Great Lakes region, today employs around 650 people.
"The recent EU retaliatory tariffs have required us to expend time, energy and resources to evaluate mitigation plans, including the possibility of moving production of Indian Motorcycles destined for Europe from Iowa to our facility in Poland," company spokeswoman Jess Rogers wrote in an email to the Minneapolis-St. Paul Business Journal.
The impact of such a move on Spirit Lake area workers was not immediately clear.
The EU last week began rolling out tariffs on $3.4 billion worth of American imports as retaliation for duties the Trump administration is imposing on European steel and aluminum. The EU list include 25 percent tariffs on motorcycles with engine cylinder capacity of 500 cc and above.
Because Polaris' Indian division's smallest engine is the 999-cc Scout Sixty, its entire product line is impacted, according to the Business Journal.
Harley-Davidson, the Indian's chief competitor, is moving forward with plans to move production for motorcycles sold in Europe out of the United States to avoid higher costs. Harley-Davidson on Monday announced its plans to shift manufacturing to Europe, setting off a war of words with Trump, who tweeted that the Milwaukee-based company was the first “to wave the White Flag” in the trade dispute between the U.S. and the EU.
Harley-Davidson said in a regulatory filing Monday that EU tariffs on its motorcycles exported from the U.S. jumped between 6 percent and 31 percent, adding about $2,200 per average motorcycle exported from the U.S. to the EU.
Tariffs are expected to increase Polaris’ costs by $15 million in 2018, Rogers told the Des Moines Register last week.
"The escalating trade war is increasing costs and has required us to expend time, energy and resources to evaluate a range of mitigation plans," Rogers said in a statement to The Journal Thursday.
Polaris opened a 345,000-square-foot plant in Opole, Poland in 2014 to manufacture off-road vehicles. It employs about 500.
Polaris’ employment in the Iowa Great Lakes region, which peaked at around 1,000, has been dwindling in recent years as the company moves production of some vehicles to other plants. The company also eliminated some Okoboji jobs after eliminating its own Victory Motorcycle line.
More recently, the company closed its Milford, Iowa, facility, which produced the Polaris Ranger and Rzr all-terrain vehicles and the Brutus utility vehicle.
The company also operates U.S. plants in Roseau, Minnesota, Osceola, Wisconsin, and Huntsville, Alabama. Some manufacturing and assembly also takes place in Monterrey, Mexico.
The Associated Press contributed to this story.