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The Harley-Davidson cult motorcycle brand is not going anywhere. Sales are down, also because regular customers are aging. In order to evade EU tariffs, the company moves part of the production and thus attracts Trump's anger.
Harley-Davidson loses buyers. (David W. Cerny / Reuters)
tsf ./ (dpa) The Harley-Davidson motorcyclist, who is under the influence of US President Donald Trump's critics, had to make significant cuts during last quarter. Compared to the same period last year, net profit declined more than 6% to $ 242.3 million, the company said Tuesday. Sales declined by just over 3% to $ 1.5 billion. Analysts, however, had feared much larger declines.
The 115-year-old American company overshadowed Trump's wrath in June by deciding to move part of their production overseas. Harley-Davidson justified the change with EU retaliatory tariffs on US products. The motorcycling company wants to avoid as much as possible price increases for European customers
The European rights applicable to Harley-Davidson are part of the EU's countermeasures on Trump's imposed tariffs on steel and aluminum. Brussels has increased tariffs on American products such as jeans, peanut butter, corn or motorcycles from 6% to 31%. That makes Harley-Davidson motorcycles in Europe cost an average of $ 2,200 more.
International Business
Harley-Davidson has been struggling with declining demand for some time. One of the problems is the aging of the American clientele. The importance of international business for the manufacturer is reflected in the quarterly figures. While motorcycle sales in the US market declined 6.4%, there was still a slight increase of 0.7% abroad.
In the future, the losses could be even worse because of the new rates. Harley-Davidson has announced that it is only expecting this year with profit margins of 9-10%. A year ago, the profit margin was still 20%.
Trump's Anger
US President Trump targeted the company just after the relocation decision. In the tweets, he talked about the "beginning of the end" and announced, "You'll be taxed like never before!" For days he scolded on Twitter. The tirade culminated in the threat of attracting international motorcycle companies into the country to compete with Harley as a domestic airline.
Trump's attacks will make the case even more difficult in the future, as they jostle his followers of Harley's purchases could hold.
US President Trump was particularly sensitive to Harley-Davidson. Because before, he had intricated the company as the embodiment of "Made in America". After taking office, he invited the Harley bosses to the White House and encouraged them: "We are proud of you!"
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