The Harley skid is not over – Barron's

The actions of the iconic motorcycle slipped 9% early Harley was caught in the trade war between the Trump administration and the European Union. Harley's vulnerable shares fell from $ 44 to $ 40 after the company warned Monday that new European tariffs could cost the company $ 100 million a year, unless it distracts some United States production. "A Harley-Davidson should never be built in another country, ever!" The president wrote on Tuesday before adding: "If they move, look, it will be the beginning of the end … they surrendered, they resigned! Aura will be gone and they will be taxed like never before! "

A year ago, in February, the new president greeted Harley's leaders and union representatives on the South Lawn of the White House by saying," It's awesome Harley-Davidson. "Trump described the Milwaukee manufacturer as the kind of company that would benefit from his plans to cut taxes and make" border adjustments "in favor of US-made products. however, we noted the challenges facing the company of a strong dollar and a steady decline in motorcycle ridership, as the middle-aged men's population who can afford the expensive motorcycles shrink.Despite the efforts of H arley, its motorcycle business figure dropped 7% last year, marking the third consecutive annual decline.

And now he is in the midst of a trade war.

Europe is the second largest market of Harley-Davidson. 40,000 bicycles in 2017, about 16% of its retail sales. The 8-K Harley said on Monday that the EU had imposed tariffs of up to 31% on its motorcycles, in response to US steel and aluminum export tariffs. EU to USA

Fares will add an average of Harley bikes sold in Europe. To preserve its short-term sales, Harley plans to keep its wholesale prices and absorb these expenses herself – at a cost that she estimates between $ 30 and $ 45 million for the rest of the year and up to $ 30 million. To $ 100 million a year.

To evade tariffs, the company said that it had to move the production of bicycles to the United States from the United States. This measure will require capital expenditures and will take nine to 18 months. Even before Europe announced tariffs, Harley had planned to close one of its four US plants in response to declining sales.

The company told us that she would not comment beyond the disclosures in her 8-K. More details will come, said a spokesman, on the July 24 revenue appeal.

In addition to the president's threat of punitive taxes and his prediction of the company's demise, a Trump tweet suggests that Harley employees and customers "

The action was trading Friday at $ 42. At 12 times this year's consensus earnings forecasts, Harley's shares have rarely been cheaper, and they are likely to become cheaper.In a trade war, you never know who the victims will be [19659005] The Trader: When the momentum begins to erase

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