Steel and aluminum tariffs bring retaliation

[dado potato]

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.

[bae]

Capital is pretty fluid these days. I'm not sure trade wars are a wise move...

[Williamsmith]

There is something disingenuous about management of a company who would belly ache over a $100 million projected negative impact when not long ago they reaped the benefit of the Republican Tax cut to the tune of 1 Billion dollars in pre tax profit! And with that in hand, closed a factory and increased shareholders dividends and stock buybacks to the tune of 696 million.

I feel sooooooo sorry for HD. Thye have been selling motorcycles like crazy and expanding overseas. Time for the CEOs to earn the bonuses they’ve been getting.

https://www.msn.com/en-us/news/other/harley-davidson-took-its-tax-cut-closed-a-factory-and-rewarded-shareholders/ar-AAxD6bK

[razz]

What I like about this SLF site on so many topics is hearing "the rest of the story," as the saying goes. There are always at least two perspectives regardless of one's political persuasion.


There is something disingenuous about management of a company who would belly ache over a $100 million projected negative impact when not long ago they reaped the benefit of the Republican Tax cut to the tune of 1 Billion dollars in pre tax profit! And with that in hand, closed a factory and increased shareholders dividends and stock buybacks to the tune of 696 million.

I feel sooooooo sorry for HD. Thye have been selling motorcycles like crazy and expanding overseas. Time for the CEOs to earn the bonuses they’ve been getting.

https://www.msn.com/en-us/news/other/harley-davidson-took-its-tax-cut-closed-a-factory-and-rewarded-shareholders/ar-AAxD6bK

[Rogar]

I would just suspect that other companies in a different position than HD will just pass the increased cost of goods along to the consumer. Which can have it's own broader collective consequences. I suppose some financial or economic guru has calculated how much of this will go on before it wipes out the tax cut benefits.

[Williamsmith]

I would just suspect that other companies in a different position than HD will just pass the increased cost of goods along to the consumer. Which can have it's own broader collective consequences. I suppose some financial or economic guru has calculated how much of this will go on before it wipes out the tax cut benefits.

The tax break for average Joe is going to vanish amid the local tax increases for schools, governments, etc. The taxman will get you before tariffs and trade wars.

[dado potato]

On July 1, Canada is implementing 25% surcharges on steel products imported from the US and 10% on aluminum products. The objective of Canada is to retaliate against US exporters to the same monetary extent that the US tariffs imposed on May 31 would have impacted Canadian exporters on the amount of steel and aluminum goods they shipped to the United States in 2017.

To raise the cost up to Canada's desired level, a 10% surcharge will also be imposed on a wide range of consumer goods imported from the US:
yogurt
roasted coffee
maple syrup and sugar
candy
pizza
soy sauce
ketchup
mayonnaise
condiments
soups
whiskies
candles
glue
insecticides
herbicides
fungicides
plastic bags
tableware & kitchenware
plywood
toilet paper
facial tissues
paper towels
tablecloths and serviettes
greeting cards
gas grills
refrigerator-freezers
water heaters
dish-washing machines
washing machines
lawn mowers
boats
mattresses
seats
pillows
quilts and other bedding
sleeping bags
playing cards
ball point pens
felt tipped pens and markers.


I understand that these surtaxes on the imports from the US are intended to be lifted when the United States Government rescinds the 25% tariff on Canadian steel and the 10% tariff on Canadian aluminum.



I am old enough to remember when President John F. Kennedy addressed the Canadian Parliament on May 17, 1961:
… Je me sens vraiment entre amis…
Geography has made us neighbors.
History has made us friends.
Economics has made us partners.
And necessity has made us allies.

Now it is a different time, and the USA has quite a different President. Still and all, it is between friends … Canada Day Greetings to the True North, Strong and Free!

[razz]

Thanks DP. The US and Canada are so integrated in their economies.