Trade War Watch: It's okay to feel a bit sorry for Harley-Davidson
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Image: Harley-Davidson
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Last year, the EU introduced an additional 25 percent import duty on top of the existing 6 percent tariff on large motorcycles, established as a response to US duties on steel and aluminum, the movement shifted the ability of Harley-Davidson thrives in the European market – a region that accounts for about one sixth of its global volume.
E of the media is focused on designing Donald Trump for Harley's situation, the situation is a little more complicated. The president's rates actually raised EU retaliatory fees, but it was Europe who decided to put their crosshairs on the iconic American motorcycle mark.
We are not really interested in who fired the first shot, and not just because we will never be able to declare a winner who satisfies everyone. Harley-Davidson faces real issues because of the commercial war, and we have treated it as a canary in the coal mine. Thanks to narrower margins, motorcycle manufacturers are more prone to financial changes than their counterparts in the automotive industry, making them a very effective barometer.
Harley-Davidson reported defective results in the first quarter on Tuesday, although Bloomberg claims the results exceeded analysts' expectations. This still meant that the company's adjusted net income for the first quarter fell by 26 per cent. With the exception of restructuring costs, tariffs and other money-eaters, HD had an income of 98 cents per share – beats the average estimate of 85 cents.
The good news runs out here, as HD said it will probably have to move more production out of US Trump has already come down on the company for its foreign production, which did so to help reduce production costs and increase overseas volume (mainly in Asia). But the tariff-related decision apparently irked him more than usual, with the president suggesting the company effectively "waved the white flag."
Now he's changed, just about a little. In 19459008, President Trump accused the EU of bullying the company with charges by quoting Fox News pundit Maria Bartiromo.
"Harley Davidson has fought with Tariffs with the EU, currently paying 31 [percent]. They have had to move the production abroad to try to offset some of the tariff they have been hit, which will rise to 66 [percent] in June 2021. @MariaBartiromo So unfair to the United States we will render! "[19659002] It is a little strange that the president comes to the company's defense; It may be a sign that these bursts with targeted tariffs come out of hand (And is not nearby) Meanwhile, HD finds itself in the midst of a political feud with little backlash, and if it doesn't build in Europe, the product will be taxed in oblivion, don't take our word for it – the company said so much 2018.
"Increasing international production to ease the EU burden of burden is not the company's preference, but represents the only sustainable option to make its motorcycles available to EU customers and maintain a viable business in Europe," explains Harley-Davidson in June last year.
Although the company's woes stretch far beyond the tariff (the biggest customer base literally dies out), it is one of the biggest problems it must face right now. This has forced it to focus almost all its efforts on managing its supply chains and factory location, rather than developing new products and effective marketing campaigns that could potentially help restore the brand's interest. You do not need much of a fantasy to create a scenario where the trade war continues to escalate – and car prices continue to rise – to a point where each producer plays it safely and dull in a period when sales growth is stagnant. 19659002] [Image: Harley-Davidson]
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