Harley-Davidson will not raise prices to cover tariff costs

Harley-Davidson will not raise prices to cover tariff costs

Harley-Davidson will not raise prices to cover tariff costs

Lovely said Harley and other companies face retaliatory tariffs in Europe and elsewhere if they try to export products.

But the biggest losers Monday were the American workers who make Harley-Davidson motorcycles whose jobs will soon be headed overseas thanks to the Trump tariffs.

Trump has already shown he is sensitive to tariffs aimed at American farmers, almost reaching a trade deal with Beijing that would have boosted Chinese imports of US agricultural goods, instead of putting billions of dollars in sales at risk.

The EU implemented tariffs on just over $3 billion worth of United States goods in response to Trump's decision to hit steel and aluminum imports with tariffs.

Harley - once praised by Trump at a February 2017 White House meeting as a model American manufacturer - didn't specify which global plants will boost output for European Union markets.

Harley has warned consistently against tariffs, saying they would negatively impact sales.

The famed motorcycle maker said in a regulatory filing Monday that European Union tariffs on its motorcycles exported from the USA jumped from 6 percent to 31 percent.

Harley-Davidson now has overseas manufacturing plants in Brazil, India and Australia and is building a plant in Thailand.

'Increasing worldwide production to alleviate the European Union tariff burden is not the company's preference, ' it said in a filing, 'but represents the only sustainable option'.

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


Instead of raising prices for consumers, the company says it will take a hit of $30 million to $45 million in 2018.

The company is shifting some production of motorcycles for European customers out of the United States to avoid EU retaliatory tariffs.

Chief Financial Officer John Olin told analysts in April he expected the tariffs to add $15 million to $20 million "on top of already rising raw materials", representing "quite a headwind for the company over the next several quarters".

In January, the company announced that it would close a plant in Kansas City, Missouri, as part of a consolidation plan after its motorcycle shipments fell to their lowest level in six years. The company's USA factories are in York, Pa.; Kansas City, Mo., and Menomonee Falls, Wis.

Fellow Republican Gov. Scott Walker is echoing those comments.

Increasing foreign investment in the United States, something Walker was in Washington advocating for at a U.S. Department of Commerce event last week, will also help reduce the trade imbalance and need for tariffs, he said.

Mr. Trump blamed past USA leaders for the simmering conflict over trade.

The tariffs, which took effect Friday, are retaliation for taxes President Donald Trump imposed on European Union shipments of steel and aluminum. The "Made in the U.S.A." crowd has merged with the "Make America Great Again" masses, and neither really seem to care that red baseball caps are sewn in China.

On Monday, the vice president of the European Union's governing body said that Europe and China will form a group aimed at reforming worldwide trade rules.

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