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Harley-Davidson, against escalating tariff costs, will start moving motorcycle production to Europe from the United States to factories abroad.
On Friday, the European Union began to apply tariffs on US imports such as bourbon, peanut butter and orange juice. EU tariffs on US goods worth $ 3.4 billion are retaliatory for the rights that the Trump administration imposes on steel and steel. to aluminum in Europe.
Harley-Davidson has sold nearly 40,000 motorcycles in the European Union last year, generating revenue after the United States, according to the company.
The maker of the iconic American motorcycle said Monday in a regulatory filing that EU tariffs on its motorcycles exported from the US jumped between 6% and 31%. The company said it expects rates to generate an additional cost of about $ 2,200 per average motorcycle exported from the United States to the EU.
"Harley-Davidson maintains a strong commitment to US-based manufacturing, which is appreciated by bikers around the world," the company said in prepared remarks. "Increasing international production to lighten the EU's tariff burden is not the company's preference, but represents the only sustainable option to make its motorcycles accessible to customers in the EU and maintain a viable business in Europe Europe is a vital market for Harley-Davidson. "
The company said that it will not increase its prices to avoid "an immediate and lasting negative impact" on sales in Europe. On the contrary, Harley will absorb a significant portion of the cost in the short term. He predicts that the cost for the rest of the year will be around 30 to 45 million dollars.
Shares of the company fell nearly 3% before the opening bell Monday. Other companies heavily reliant on aluminum and steel also declined.
Harley-Davidson said the move from targeted US production to international facilities could take at least nine to eighteen months.
On Monday, the Vice President of the European Union said that Europe and China would form a group to update global trade rules to address technology policy, government subsidies and other emerging complaints so to preserve support for international trade.
Vice President of the European Commission, Jyrki Katainen, said that the unilateral action of US President Donald Trump in steel disputes, Chinese technology policy and other issues highlighted the need to modernize the World Trade Organization.
The Wall Street Journal reported that the Trump administration plans to impose restrictions on Chinese investments in US technology companies and high-tech exports to China.
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