Harley-Davidson shares drive up to three-year high on trade truce
Shares in Harley-Davidson revved up to a three-year high today after the EU suspended an increase in retaliatory tariffs on its motorbikes as part of a trade truce with the US.
The EU had threatened to double tariffs on Harley’s bikes, American-made whiskey and power boats to 50 per cent from next month in retaliation for steel and aluminium tariffs imposed by former US President Donald Trump.
But the European Commission today said it would suspend the planned hike for up to six months.
The decision drove Harley’s share price up more than eight per cent — their highest level since January 2018.
While the company welcomed the move, it said it would continue legal challenges of an EU ruling that revoked a concession allowing it to ship bikes from facilities outside the US at a tariff rate of six per cent.
“This is the first step in the right direction in a dispute not of our making,” said chief executive Jochen Zeitz. “Harley-Davidson employees, dealers, stakeholders and motorcycles have no place in this trade war.”
Harley’s bikes are now subject to a 25 per cent retaliatory tariff, meaning the overall duty on its shipments to the EU is 31 per cent.
The iconic bike brand, which was founded in 1903 in Milwaukee, has outlined plans to ramp up its investment in Europe as part of a turnaround strategy.
But the tariffs risk putting it at a disadvantage compared to rivals such as Triumph, Honda and Suzuki.
Harley tried to sidestep the measures by shifting production from the US to Thailand, prompting Trump to back a boycott of the company.
But the EU last month ruled that it would consider Harley bikes made in Thailand as US-made for the purposes of tariffs.