Harley warns of ‘significant impact’ from retaliatory tariffs

Company sold nearly 40k motorcycles in Europe last year

Harley-Davidson headquarters
Harley-Davidson Inc.'s headquarters in Milwaukee.

Last updated on July 2nd, 2019 at 09:08 pm

Milwaukee-based Harley-Davidson Inc. is warning that potential retaliatory tariffs would have “a significant impact” on the company after the European Union included motorcycles on a list of products targeted in response to President Donald Trump’s plan to increase steel and aluminum tariffs.

Harley-Davidson headquarters
Harley-Davidson Inc.’s headquarters in Milwaukee.

Bloomberg reported the EU is planning a 25 percent tariff on around $3.5 billion in U.S. goods, including motorcycles, jeans and bourbon whiskey.

“A punitive, retaliatory tariff on Harley-Davidson motorcycles in any market would have a significant impact on our sales, our dealers, their suppliers and our customers in those markets,” Harley said in a statement.

Europe is the second largest market for Harley motorcycles with 39,773 bikes sold at retail last year, accounting for almost 42 percent of international retail sales. Retail dealers in the U.S. sold 147,972 motorcycles in 2017.

Trump announced last week he plans to impose a 25 percent tariff on steel imports and 10 percent on aluminum imports. The plan has drawn opposition from top Wisconsin Republicans, including Gov. Scott Walker and House Speaker Paul Ryan, of Janesville. Brewing giant MillerCoors, which has about 1,400 employees in Milwaukee, also voiced its opposition to the plan.

“We support free and fair trade,” Harley’s statement said. “Import tariffs on steel and aluminum will drive up costs for all products made with these raw materials, regardless of their origin.”

Increasing international sales to 50 percent of revenue is among the key goals of a 10-year plan Harley unveiled last year. The company is also no stranger to challenges of international trade, facing import tariffs as high as 100 percent in some countries.

To get around those trade barriers, Harley has established assembly facilities in Brazil, India and most recently Thailand.

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Arthur Thomas
Arthur covers manufacturing for BizTimes. He previously was managing editor at The Waukesha Freeman. He is a graduate of Carroll University and did graduate coursework at Marquette. A native of southeastern Wisconsin, he is also a nationally certified gymnastics judge and enjoys golf on the weekends.