A few weeks ago, Harley-Davidson and Polaris Industries announced a potential move of some of their production to Europe. Retaliatory tariffs had made exporting their products to Europe a far more expensive prospect. Now, the President has apparently negotiated a new trade deal with the European Union. Could this new deal change Harley and Polaris’ plans?
Is Tariff Relief Coming for American Motorcycle Manufacturers?
Not long after the European Union announced retaliatory tariffs following President Trump’s tariff hikes on European aluminum and steel, things looked dire for Harley-Davidson. The company was predicting a $100 million cost thanks to these tariffs. A devastating blow considering motorcycle sales fell in the last quarter. That fueled plans to move the production of bikes meant for the European market overseas, but these plans could soon be scrapped.
In a surprise press conference, President Trump and European Commission President Juncker announced an agreement. The nations have since promised to work together to create beneficial trade deals and reduce barriers to trade. Part of these dialogues include the end of some of the retaliatory tariffs imposed by both the U.S. and the E.U.
This news elated farmers here in the U.S., who were also heavily hit after Europe retaliated against the President’s initial tariff increases. However, it seems that both the American auto industry and motorcycle industry will benefit from the deal as well.
Upon the announcement, Harley-Davidson’s stock rebounded to finish up 1 percent. This was good news for the manufacturer that had announced it expected a 1 percent drop in its profit margins for 2018. That’s a lot considering its original estimates were between 9.5 and 10.5 percent.
Hopefully, this new agreement between the U.S. and the E.U. will be enough to bolster the American motorcycle industry. Now, we’re just waiting to see who makes the next move.
The motorcycle market watch has been brought to you by the attorneys who ride at Metier Law Firm.