Trump Warms to Harley Davidson, Says EU Tariffs 'unfair'

Trump Warms to Harley Davidson, Says EU Tariffs 'unfair'

"The shares have rallied (we think) in anticipation of potential tariff relief ... we remain cautious in our outlook for the USA motorcycle industry, and continue to rate the shares Hold", Stifel analyst Drew Crum said during Harley-Davidson's earnings call.

The EU initially singled out Harley-Davidson a year ago in response to President Trump's tariffs on European steel and aluminium.

Trump had previously criticized Harley-Davidson after the company considered moving part of its production overseas due to the rising costs of steel and aluminum. His latest comments, meanwhile, appeared to be more sympathetic to the motorcycle company.

The Wisconsin-based company past year announced plans to move production of its motorcycles destined for the European Union to its overseas facilities from the United States to avoid EU tariffs imposed in response to Trump's duties on steel and aluminum imports.

But on Tuesday, after Harley blamed the 31% duties for a large drop in profits, Mr Trump appeared to back the firm.

Speaking on Twitter, the President cited figures showing that tariffs on the bikes will rise to 66 per cent in June 2021.

It said USA retail motorcycle sales, or sales by dealers to customers, fell 4.2 per cent in the first quarter ended March. 31.

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"The big impact for us is the European Union tariffs".

It came as the motorcycle maker this morning posed results for the first quarter of the year, showing profit down 26.7 per cent year-on-year.

Rows of Harley-Davidson motorcycle sit for sale outside of the Harley-Davidson of New York City showroom store in the Queens borough of New York City, on June 25, 2018.

The iconic "Made in America" manufacturer defended its decision to shift some production overseas by saying the move was the only sustainable option to maintain a viable business. A really bad move!

Harley-Davidson Inc. on Tuesday surged past expectations for first-quarter profit and stuck to its full-year shipment forecasts in the face of concerns over falling USA sales and European import tariffs, sending its shares up 3 per cent.

Overall sales, however, continued to fall.

The company's quarterly report revealed that its revenue from motorcycles and related products fell 12.3 percent to $1.19 billion from January through March, while year-on-year net income fell to $127.9 million, or 80 cents per share, from $174.76 million, or $1.03 per share. European sales were down 2.1 percent.

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