Harley-Davidson shares closed lower Monday after the iconic US motorcycle brand said that in response to the EU tariff increases, it would begin making plans to shift production of its bikes for European markets, to its international plants.
The firm said in an SEC filing that it preferred that option over raising prices for European customers.
Harley-Davidson shares ended the US Monday trading session 5.97% lower at $41.57. The stock is trading in the green in out-of-hours activity, however.
Harley-Davidson’s production plans
The US motorcycle maker said that the EU had raised import charges in response to the US’ steel import hikes for the region. Those hikes mean Harley-Davidson EU import costs will rise from 6% to 31%.
“Harley-Davidson believes the tremendous cost increase, if passed onto its dealers and retail customers, would have an immediate and lasting detrimental impact to its business in the region, reducing customer access to Harley-Davidson products and negatively impacting the sustainability of its dealers’ businesses,” the motorcycle maker said.
“To address the substantial cost of this tariff burden long-term, Harley-Davidson will be implementing a plan to shift production of motorcycles for EU destinations from the US to its international facilities to avoid the tariff burden,” it said.
The firm added that it remains committed to its US-based manufacturing process.
Trump surprised by Harley-Davidson plans
Following the news from the US brand, president Trump shared his views that he was surprised at Harley-Davidson’s decision.
“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 EU, which has hurt us badly on trade, down $151 Billion. Taxes just a Harley excuse - be patient!,” Trump said in a tweet.
And, separately White House press secretary Sarah Sanders said: “Trump will continue to push for free, fair and reciprocal trade, in hopes that the EU will join us.”