IN
THE
WIND
P24
HARLEY DAVIDSON IN THE
CROSSHAIRS AS TRADE WAR LOOMS
A
s talks of Washington's new
tariffs on metal imports loom,
Harley-Davidson finds itself quite
unwillingly in the crosshairs of
retaliatory tariffs from the Euro-
pean Union. The EU revealed
plans to target Harley-Davidson
motorcycles, among other prod-
ucts, in response to President
Trump's new tariffs on EU metal
exports. On Friday, June 1, the
Motor Company warned of a
"significant impact" on its sales if
the plan goes forward.
It's no small coincidence the
EU took aim at a piece of Ameri-
can iconography (the proposed
tariffs also include Levis and
whiskey) that happens to be
based in Wisconsin, home state
of Speaker of the House Paul
Ryan. (Likewise, the bourbon/
whiskey tariff will greatly impact
Senate Majority Leader Mitch
McConnell's home state of Ken-
tucky.)
In a report on Reuters.com, a
statement from Harley-Davidson
read, "We support free and fair
trade and hope for a quick reso-
lution to this issue. We believe
a punitive, retaliatory tariff on
Harley-Davidson motorcycles in
any of our major markets would
have a significant impact on our
sales, our dealers, our suppli-
ers and our customers in those
markets."
Retaliatory measures not-
withstanding, Harley is facing
a significant challenge from
Trump's proposed tariffs on
metal imports alone. In late April,
H-D explained that tariffs of 25%
on steel and 10% on aluminum
stood to raise its costs by $15-20
million in 2018.
Donald Trump famously met
with the executives of Harley-Da-
vidson early last year, promising
to "make Harley great again," but
so far, the global trade policies
of the administration have not
made life easy for the brand as it
struggles to counteract slumping
demand in the American market.
In order to offset the decline
of its ever-faithful boomer-gener-
ation demographic in the U.S.,
Harley-Davidson is looking out-
side its borders for growth. H-D
currently does 43% of its total
volume sales overseas but has
stated its goals of raising that to
50% in the next decade. Their
sales figures are quickly trend-
ing in that direction, with inter-
national sales currently growing
while domestic sales remain at
a steady decrease. But if new
global trade barriers are put in
place with Washington's pro-
posed metal import tariffs and
the EU's proposed response,
Harley-Davidson will find itself in
a tough spot both at home and
abroad. The company says it is
currently evaluating options for
managing the cost increases it
might have to face.
Jean Turner
