Harley Will Move Some Production Overseas

This is what to worry about with a trade war. Harley-Davidson (HOG) said they’ll move some production out of the U.S. due to trade tariffs.

In response to the Trump administration’s tariffs, the EU responded by jacking up the tariffs on U.S. bikes. That dings Harley $2,200 per each bike.

Harley-Davidson’s move is some of the most direct evidence yet that tit-for-tat trade fights between the United States and other countries have consequences for American companies. Harley-Davidson said it stood to lose as much as $100 million a year.

“Increasing international production to alleviate the EU tariff burden is not the company’s preference, but represents the only sustainable option,” Harley-Davidson said in a regulatory filing on Monday.

The EU began imposing tariffs Friday on $3.2 billion worth of American goods, including motorcycles, orange juice, bourbon, peanut butter, motorboats, cigarettes and denim. They are a response to the Trump administration’s tariffs on steel and aluminum imports from Europe.

For motorcycles, the EU raised its 6% tariff to 31%. That will make each bike about $2,200 more expensive to export, Harley said.

Last year, Harley sold 140,000 bikes in the U.S. and about 40,000 in Europe.

Posted by on June 25th, 2018 at 12:29 pm


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