Harley Davidson, with success gains

New York

The iconic American motorcycle construction company Harley Davidson, which finds itself in a difficult economic situation, warned that a trade war between the United States and its partners would erode their profits in 2018.

Born 115 years ago it reduced its annual target operating margin, barometer of its profitability, "due to the expected impact of tariffs" imposed by the government of the Republican President Donald Trump. For this year, it bet between 9% and 10% of profits, against 9.5% to 10.5% previously.

Since June 22, the European Union (EU) has decided to impose additional tariffs on a series of typically American products, including Harley-Davidson motorcycles, in retaliation for customs duties set by Washington on imports of steel and aluminum. The group's headquarters is located in Wisconsin, a stronghold of various Republican leaders, including the House of Representatives owner Paul Ryan.

European tariffs went from 6% to 31% for the brand's products entering the European soil, which increases the retail price of vehicles by about $ 2 200.

The manufacturer has decided to deal with this cost overrun instead of increasing their selling prices and also plans to move some of their production to avoid these tariffs, which came into effect one week before the end of the second quarter. Harley-Davidson confirmed that on July 30, it would reveal a plan to relaunch the brand and give details of its new production sites.

The company's sales fall in the United States, but increase abroad; Europe is its second largest market

AUTOMOTRICES

Meanwhile, the trade dispute and high tariffs on steel and aluminum have also put pressure on the profits of the automotive sector, which provoked shares of Ford Motor Co. and parts manufacturers.

GM noted that there were "significant and recent increases in material costs", so it now expects earnings of $ 5.14 per share by 2018, below its forecast previous $ 6.

A few days ago, the Center for Automotive Research estimated that the possible privileges of 20% to 25% on imports of cars and auto parts would increase the price of an average vehicle by $ 4,400. Rates would also eliminate more than 714,000 jobs in the United States. (AFP and AP)