Harley Davidson (NYSE:HOG) is fighting back the EU’s retaliation tariffs and President Trump is not pleased with their move.
The motorcycle company recently announced that it is moving some production overseas because of increased costs from the EU’s retaliatory tariffs against President Trump’s administration’s duties on steel and aluminum.
According to Harley Davidson(NYSE:HOG) , almost 40,000 motorcycles had been sold in the European Union in 2017 and was the second biggest revenue maker for the company after the U.S.
Trump reacted through Twitter and said he was surprised, writing “Surprised that Harley-Davidson, of all companies, would be the first to wave the White Flag. I fought hard for them and ultimately they will not pay tariffs selling into the E.U., which has hurt us badly on trade, down $151 Billion. Taxes just a Harley excuse – be patient! #MAGA”
The company stated, “Harley-Davidson maintains a strong commitment to U.S.-based manufacturing which is valued by riders globally,” the company said in prepared remarks. “Increasing international production to alleviate the EU 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 critical market for Harley-Davidson.”
In a filing with the SEC, Harley revealed, “The E.U. tariffs will add $2,200 to the cost of an average motorcycle, threatening “an immediate and lasting detrimental impact to its business.”
President Trump took to Twitter to respond to the news and wrote that if the company moves operations overseas, ‘they will be taxed like never before!’
He wrote, “Harley must know that they won’t be able to sell back into U.S. without paying a big tax!”
He also tweeted, “A Harley-Davidson should never be built in another country-never! Their employees and customers are already very angry at them. If they move, watch, it will be the beginning of the end – they surrendered, they quit! The Aura will be gone and they will be taxed like never before!”
“Early this year Harley-Davidson said they would move much of their plant operations in Kansas City to Thailand,” Trump said in another tweet. “That was long before Tariffs were announced. Hence, they were just using Tariffs/Trade War as an excuse.”
Analysts at Stifel lowered their earning estimates for this year and next for Harley Davidson by 19 cents and 45 cents respectively, citing the impact from the EU tariffs. The firm has a “hold” rating on the stock.