Harley-Davidson plans to shift some manufacturing of its iconic motorcycles overseas to avoid retaliatory European tariffs imposed last week, the company said on Monday.
The announcement comes as the company, founded in the early 1900s, is also buffeted by higher steel costs following tariffs enacted by US President Donald Trump, who had embraced the company as an emblematic US industrial firm in the early days of his administration.
The US president expressed disappointment.
Photo: AFP
“Surprised that Harley-Davidson, of all companies, would be the first to wave the White Flag,” Trump tweeted.
“I fought hard for them and ultimately they will not pay tariffs selling into the EU, which has hurt us badly on trade, down US$151 Billion. Taxes just a Harley excuse — be patient!” he wrote.
Harley-Davidson suggested it had no choice after the EU on Friday hit US motorcycles with duties of 31 percent, up from 6 percent, boosting the cost to EU consumers by about US$2,200.
The EU targeted the US vehicles as part of its rebuttal to Trump’s tariffs on imported aluminum and steel, one aspect of his multifront trade war.
Moving production overseas is expected to require nine to 18 months, so in the near term, Harley-Davidson will absorb the costs of EU tariffs, the company said in a regulatory notice.
That would add an estimated US$90 million to US$100 million annually.
“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,” the company said.
Some analysts expect to see more instances of company shifts in supply chain or manufacturing venues due to trade tariffs when the second-quarter earnings season starts early next month.
Harley-Davidson currently has overseas manufacturing plants in Australia, Brazil and India. It is building a plant in Thailand.
The company did not specify where the additional manufacturing would go.
“We are currently assessing the potential impact on our US facilities,” Harley-Davidson spokesman Michael Pflughoeft said. “We are hopeful the US and EU governments will continue to work together to reach an agreement on trade issues and rescind these tariffs.”
On Wall Street, Harley-Davidson shares dropped sharply 5.97 percent on Monday.
Harley-Davidson has been relying on Europe and other international markets to help offset declining sales in the US, where the baby boomers who have long bought the vehicles are aging and younger consumers are not taking to the motorcycles in a big way.
In the first quarter, retail sales of motorcycles fell 12 percent in the US, but rose nearly 7 percent in the European, Middle East and Africa region.
In the wake of the sluggish US sales, Harley-Davidson in January announced that it would close its Kansas City, Missouri, assembly plant and consolidate jobs in York, Pennsylvania.
Adding to the difficulty facing the company were steel and aluminum tariffs on the EU, Canada and Mexico finalized by the Trump administration early this month.
Chief financial officer John Olin told analysts in April he expected the tariffs to add US$15 million to US$20 million “on top of already rising raw materials,” representing “quite a headwind for the company over the next several quarters.”
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”