Harley-Davidson to shift motorbike production overseas over European Union tariffs

The EU imposed retaliatory tariffs last week on $3.4 billion worth of USA products like bourbon, motorcycles and orange juice.The new duties are in direct response to President Trump's decision to increase fees on aluminium and steel coming from Europe.

The Milwaukee-based company said a rise in tariffs from 6pc to 31pc on its motorbikes exported to European customers would result in a "tremendous" cost increase of approximately $2,200 (£1,656) on each bike.

Harley plans to absorb much of the cost increase tied to the EU's tariffs because passing it on to dealers or customers would make an "immediate and lasting detrimental impact" on its business, it said in the filing.

The Milwaukee-based company sold nearly 40,000 motorcycles in the European Union past year, generating revenue second only to the United States.

The EU tariffs increased to 31 percent from 6 percent as part of a package of retaliatory measures announced by the bloc after the Trump administration raised tariffs on US steel and aluminum imports. The EU will now impose a 25 per cent tariff on all motorcycles above 500 cc which are being brought in from the United States.

Bumping the price of each bike by more than $2,000 could well sink Harley-Davidson's chances to compete in non-US markets.

In January, the company announced the closure of a plant in Kansas City, Missouri as part of a consolidation plan after its motorcycle shipments fell to their lowest level in six years. Those duties served as the bloc's response to Trump's imposition of steel and aluminum tariffs on European Union, which the president justified under specious "national security" grounds. Daimler AG warned last week that escalating tension between the US and China will impair earnings its Alabama SUV plant and lower profit this year. However, Harley-Davidson has warned consistently against tariffs, saying they would hurt sales.

"Remember, they came to us, for example, pointing out that India had a 100 percent tariff on Harley Davidsons".

More news: Senegal secure Africa's first win at World Cup

It's not like Harley-Davidson only manufactures its products in the U.S. right now, though.

Shares in Harley-Davidson were down by 4.1 percent to $42.38 (£31.92) shortly after the market opened.

Harley has been aiming to boost overseas sales of its motorcycles to 50 per cent of annual volume from about 43 per cent.

Struggling to overcome a slump in U.S. demand, Harley has been aiming to increase sales of its iconic motorcycles overseas to 50 per cent of total annual volume from about 43 per cent now.

Harley's move is an example of what economists say will likely be a growing trend: businesses leaving the United States because of Trump's tariffs.

"This is further proof of the harm from unilateral tariffs", AshLee Strong, a Ryan spokeswoman, said Monday.

Trump announced the new tariffs, which affect imports of steel and aluminum from Canada, Mexico, and the European Union, back in late May. Who knows? Since no one in the White House seems to understand how global trade works, and we've seen how capricious and easily distracted The Donald is, it's 50/50 whether or not the tariffs go into effect or he gets distracted by a squirrel and forgets all about them.

(Copyright © 2015. All Rights Reserved.)
 
Recommended

Trump Orders Creation of 'Space Force'
The announcement also put to rest any questions about where the Trump Administration would move policy around space exploration . In his remarks at Cape Canaveral, Trump said the new force would be "separate, but equal" from the other military branches .

Russian Federation puts doubts to rest with rout of Saudi Arabia
I don't believe that the opposing team has done anything to surprise us - I think that a poor performance explains the result. Enthusiasm was at a premium, but there are some players with star quality and an ability to win them the game.

Google welcomes the summer solstice in new Doodle
It brings the longest day and shortest night of the year for the 88 percent of Earth's people who live in the Northern Hemisphere. A solstice is an astronomical event during which the sun is at its greatest northerly or southerly distance from the equator.

Fallen Kingdom Tracking Well Behind The Original
Anways, the outlook isn't all positive for the fifth dino disaster flick in the Jurassic Park franchise heading into the weekend. After the events of 2015's Jurassic World , the park run by Claire ( Bryce Dallas Howard ) was completely destroyed.

US Open: Phil Mickelson explains freaky decision to hit a moving ball
Then he kept on with his round and parred the most hard hole on the course, the 14th, still smiling and acknowledging fans. Shinnecock Hills has been ripping apart the world's best players all week and it all must have just gotten to Mickelson.

'Canadians smuggle scuffed shoes out of USA to avoid tariffs'
Trump had already warned last week of " additional tariffs " should Beijing hit back with tit-for-tat duties on American goods. Apple CEO Tim Cook has been hard at work trying to make peace before the brewing trade war with the USA and China blows up.

Brexit: Time to 'intensify efforts', Irish PM says
The President of the European Commission will address a joint sitting of the Dáil and Seanad this morning . He was backed up by European Commission President Jean-Claude Juncker, who said: "Ireland is not alone".

Tory Brexit rebels could collapse the Government, says…
Tory Brexiteers are fiercely resistant to the idea because they believe it could effectively be used as a Brexit veto to keep the United Kingdom in the EU.

Merkel facing her ‘WORST CRISIS’ ever: Chancellor’s coalition on brink over migrants
Seehofer has been calling for Germany to turn back migrants previously registered as asylum-seekers in other European countries. Seehofer's ultimatum has become one of the biggest challenges to Merkel's authority since she took power almost 13 years ago.

Iran lists demands for improving relations with US
Iran, however, stressed that it will return to pre-JCPOA conditions if the nuclear deal fails. Both the United States and Iran's demands are non-starters for the opposite party.

Prosecutors pull 700 pages of encrypted messages from Michael Cohen’s phones
Avenatti's actions are mainly driven by his seemingly unquenchable thirst for publicity", the motion said. Trump has repeatedly said there was no collusion, and Russian Federation has denied interference.

Mexico see off South Korea to continue flawless World Cup start
This win followed one of the World Cup's most confounding upsets, when Mexico toppled Germany 1-0 in its opener. If Germany fails to win, Mexico locks up a spot in the round of 16.

Messi misses penalty as Iceland hold Argentina to draw
And to do that against one of the best teams in the world against the best player in the world, shows that we know something'. Messi just missed a chance before Aguero opened the scoring, creating space on his left and ripping a shot into the goal .

Melania Trump doubles-down with "I really don't care" jacket
But it wasn't long before the first lady's controversial jacket threatened to overshadow the entire goodwill junket to the border. REUTERS/Kevin LamarqueFirst lady Melania Trump boards the plane as she departs Joint Base Andrews on her way to Texas on June 21.

Kane's dramatic stoppage-time goal gives England win over Tunisia
Alli had the first chance of the second half six minutes after the restart as his header was scooped out by Ben Mustapha. The last time these two teams met opened the 1998 World Cup , a match England won 2-0.


More News

News
More News