Donald Trump’s tit-for-tat tariff war with the European Union has forced iconic US motorcycle manufacturer Harley-Davidson to move some of its production overseas.

Harley-Davidson’s announcement Tuesday morning (AEST) is the first by a major US company, implying that the Trump administration’s implementation of tariffs on European steel and aluminium and counter-tariffs by the EU is the source of US jobs leaving the country.

In response to Mr Trump’s “America First” policy, the EU enacted tariffs on more than $3 billion worth of US goods on Friday.

The EU duties on US-made motorcycles were raised from six per cent to 31 per cent – an increase Harley-Davidson said would raise incremental costs per motorcycle exported from the US to the EU by US$2200 ($3000).

“To address the substantial cost of this tariff burden long-term, Harley-Davidson will be implementing a plan to shift production of motorcycles for EU destinations from the US to its international facilities to avoid the tariff burden,” the company said on Monday local time.

The company will shift production of some of its bikes overseas in order to avoid retaliatory tariffs by the European Union. Photo: Getty

As a result, the company’s stock fell more than six per cent and is expecting a further decline of more than 18 per cent for the year.

Mr Trump responded to Harley-Davidson’s announcement on Tuesday (AEST) via Twitter.

“Surprised that Harley-Davidson, of all companies, would be the first to wave the White Flag. I fought hard for them and ultimately they will not pay tariffs selling into the E.U., which has hurt us badly on trade, down $151 Billion. Taxes just a Harley excuse – be patient!” he wrote.

Surprised that Harley-Davidson, of all companies, would be the first to wave the White Flag. I fought hard for them and ultimately they will not pay tariffs selling into the E.U., which has hurt us badly on trade, down $151 Billion. Taxes just a Harley excuse – be patient! #MAGA

— Donald J. Trump (@realDonaldTrump) June 25, 2018

Harley-Davidson said it would not raise retail or wholesale prices of its motorcycles to cover costs and that it will not be moving production to Europe as a result of the tariffs.

It sold nearly 40,000 new motorcycles in Europe last year – 16 per cent of overall sales – its biggest market outside of the United States, the company says.

The motorcycle giant has overseas assembly plants in Australia, Brazil, India and Thailand.

The company expects additional investment in international plants to take nine to 18 months to finalise.

In February, Mr Trump thanked Harley-Davidson for its commitment to “building things in America” and slammed companies that exported jobs.

“So it’s great to have Harley-Davidson. What a great, great group of people and what a fantastic job you do. And thank you for all of the votes you gave me in Wisconsin.” Mr Trump said at the time.

“So thank you, Harley-Davidson, for building things in America.  And I think you’re going to even expand — I know your business is now doing very well and there’s a lot of spirit right now in the country that you weren’t having so much in the last number of months that you have right now.”

-with agencies