Harley' cross-border ride to escape trade war

Share

According to Bloomberg, the growing trade war between Europe and the States is costing Harley-a company The Donald held up as a pinnacle of American Manufacturing just a short year ago-upwards of $100 million US dollars a year.

Harley-Davidson said the EU's tariffs would add, on average, $2,200 (£1,660) to each bike exported to Europe from the United States as the import tax increases from 6% to 31%.

Harley-Davidson said that moving some production from the U.S.to factories overseas could take at least nine to 18 months to be completed.

Europe is Harley's second biggest market outside the USA and sold nearly 40-thousand motorcycles in the Europe past year.

"Harley-Davidson maintains a strong commitment to USA -based manufacturing which is valued by riders globally", the company's filing said.

In a Securities and Exchange Commission filing Monday, Harley-Davidson said the tariffs imposed by the European Union "would have an immediate and lasting detrimental impact to its business in the region".

Harley stock was down 6.6% on Monday afternoon. That increases the costs for companies to bring the parts they need into the U.S. to complete their products.

Mr Trump said he was surprised the motorcycle maker had been "the first to wave the white flag".

Mr Trump says the duties are necessary to protect the United States steel and aluminium industries, which are vital to national security.

While Trump denies accountability, blaming Harley Davidson for their decision to move production, Reuters tells a different story, expressing a potential loss for the company of approximately $100 million dollars.

It's still unclear where the company would move the work, but Indian observers on Tuesday hoped that their existing Harley-Davidson production hub would see a boost. "Taxes just an excuse - be patient!" Harley-Davidson said it stood to lose as much as $100 million a year.

Supreme Court rules in favor of online sales tax
The court corrected a fundamental unfairness in sales tax collections, and state legislators have an obligation to follow up. Hart Posen an associate professor at the Wisconsin School of Business thinks that the decision can be a boon for Amazon.

Motorcycles were hit with a whopping 31 percent tariff, a penalty that amounted a 25 percent increase in costs.

Trump's attack came after the company said in a filing earlier Monday that it would produce motorcycles bound for European countries in overseas factories.

Trump's economic and trade advisers have characterized the tariffs as a matter of national security, although even the president has said that they're also being imposed for other reasons.

A US motorcycle sales slump has deepened since then, spurring Harley's decision in January to close a plant in Kansas City, Missouri, eliminating about 260 jobs.

Harley Davison is based in Milwaukee, Wisconsin and employs 5,800 workers.

Ramping up output in worldwide plants for the European Union may take at least nine to 18 months.

A week ago, a 25 percent tariff on steel and a 10 percent tariff on aluminum affecting trade partners Canada, Mexico and the European Union, was implemented by the Trump administration.

Harley-Davidson did not immediately respond to a request for comment Tuesday.

Harley-Davidson sold 39,773 motorcycles in Europe in 2017, it said in its annual report.

The EU, like Canada, Mexico and China all are aiming retaliatory tariffs at targets aimed to weaken Trump and the GOP in key political battlegrounds.

Analysts at Baird Equity Research cut its 2018 profit estimates for Harley-Davidson to US$3.70 per share from US$3.90 and now expect 2019 profit of US$3.85, down from US$4.20.

Share