On June 25 Harley-Davidson filed with the SEC a prediction that their earnings would be negatively impacted by $90 to $100 million on a full-year basis due to EU tariffs on Harley-Davidson motorcycles exported from the United States. The EU tariffs which became effective on 6/22 were imposed in response to US tariffs the US imposed on steel and aluminum from the EU to the US.


The EU tariffs on Harley-Davidson motorcycles exported from the US have increased from 6% to 31%. HD decided they will not raise prices to dealers in the EU to cover the cost of the retaliatory tariffs. Rather, they will absorb the costs in the short term, while they take 9 to 18 months to complete a process of moving production from the US to their international facilities.


"Harley-Davidson … remains fully engaged with government officials in both the US and EU … to rescind all tariffs..."


President Trump responded with 4 tweets from 6:16 to 7:17 AM on 6/25... essentially criticizing HD for quitting, and warning HD that they will regret moving any production abroad. The President seems to still believe "Trade wars are good, and easy to win."


In my view, tariffs are a source of revenue for government which creates winners and losers arbitrarily. The people who make steel might be winners, but the people who use steel to make nails might be losers, especially if they are already operating on a thin profit margin.