Harley Davidson Blames EU Tariffs For Drop In Profits, Trump Backs Harley

United States president Donald Trump has stood out in support of Harley Davidson motorbike maker by pledging to reciprocate against the so called “unfair” trade import duties imposed on the bikes of the company by the European Union

The US heavy duty bike maker had earlier announced its decision to shift American production overseas with the aim of bypassing the EU import tariffs which was severely criticised by Trump.

However, this time around, Trump clearly backed the company following a significant drop in its profits being attributed to the 31 per cent import duties imposed by the EU on its bikes by the company.

T duties were “so unfair”, adding: “We will Reciprocate!”, Trump said while responding to comments on Fox Business on Twitter.

These comments come even as both the US and the EU get ready for negotiations aimed at reducing the trade tensions between the two traditional trading partners.

Trump tweeted: “Harley Davidson has struggled with Tariffs with the EU, currently paying 31%. They’ve had to move production overseas to try and offset some of that Tariff that they’ve been hit with which will rise to 66% in June of 2021.” @MariaBartiromo So unfair to U.S. We will Reciprocate!

In retaliation for duties imposed by the US on imported steel and aluminium from the EU, Brussels imposed tariffs on a raft of US-made goods last June. The new hiked EU tariffs increased the import duties for Harley bikes from 6 per cent to 31 per cent and those are against scheduled to increase more in 2021.

The company would stand to lose between $100m and $120m in 2019 because of the multiple trade fights that the Trump administration has engaged in with its trading partners, the US bike maker said on Tuesday.

For example, the trade war of the US with the second largest economy of the World – China, has resulted in the company facing an import tariff in the country of 55 per cent.

However the company feels that its would be impacted to greater extent because of the EU tariffs and added that the hike EU import duties had caused the company to lose out on about 27 per cent of profits to $127.9m in the first quarter.

While Harley was the most sought after bike in the 1960s and 70s, years of fading interest in the brand also compound the current issues its faces because of trade tensions, say analysts.

An agreement on their mutual intent to reduce trade barriers was arrived at last year between the President Trump and the head of the European Commission, Jean-Claude Juncker. And plans for formal trade talks with the US were approved by the EU earlier this month. .

There were news reports earlier this year that claimed that imposing new tariffs on EU imported vehicles was being contemplated by the Trump administration.

Trump had assured him there were no plans to do this “for the time being”, Juncker later said. He however did not mince words that there would be an immediate response from the EU in such a situation.

(Adapted from BBC.com)

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Categories: Economy & Finance, Geopolitics, Regulations & Legal, Strategy, Sustainability, Uncategorized

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