Harley-Davidson to shift some production overseas due to EU retaliatory tariffs

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Shares of Harley-Davidson plunged Monday after the iconic American motorcycle manufacturer said it will begin shifting some production overseas to offset the impact of retaliatory EU tariffs on certain U.S. goods.

The statement is one of the first by a major U.S. company that impllies the recently announced tit-for-tat tariffs will force it overseas, and counters the Trump administration's efforts to protect U.S. jobs by implementing tariffs.

In response to U.S. duties on European steel and aluminum, the EU enacted tariffs Friday on more than $3 billion worth of U.S. goods ranging from bourbon to yachts.

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"To address the substantial cost of this tariff burden long-term, Harley-Davidson will be implementing a plan to shift production of motorcycles for EU destinations from the U.S. to its international facilities to avoid the tariff burden," the Harley-Davidson said in the filing.

The company expects the additional investment in international facilities to take at least 9 to 18 months to complete.

The stock fell 5.5 percent in midday trading Monday, tracking for a decline of more than 17 percent for the year so far.

The EU tariffs reduce the company's 2018 profits by 5 to 8 percent, according to a CNBC analysis of Thomson Reuters data and Harley's cost projections. The full-year impact of $90 million to $100 million is about 15 percent of the company's annual profits.

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THE PRESIDENT: So it’s great to have Harley-Davidson. What a great, great group of people and what a fantastic job you do. And thank you for all of the votes you gave me in Wisconsin. Some people thought that was an upset; I thought we were going to win it. From the beginning, we thought we were going to win it.

Harley-Davidson is a true American icon, one of the greats. Your motorcycles have carried American servicemembers in the war — in the wars. They take care of our police officers. And I see it so often — whenever I go — whenever there’s a motorcycle group, oftentimes it’s a Harley. And the sound of that Harley is a little different, I have to tell you. It’s really good.

So thank you, Harley-Davidson, for building things in America. And I think you’re going to even expand — I know your business is now doing very well and there’s a lot of spirit right now in the country that you weren’t having so much in the last number of months that you have right now. You see what’s happening.

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