Shares in Harley-Davidson (NYSE:HOG) dropped in pre-market trading on the New York market, after the group highlighted the major impact EU tariffs will have on production.
The motorcycle-maker said that it had already made plans to move some manufacturing out of America, after the EU tariffs rose from 6 percent to 31 percent on Monday. This will add around $2,200 to the price of a US-exported motorcycle, having a serious effect on their competitiveness in the EU market.
“Harley-Davidson expects ramping-up production in international plants will require incremental investment and could take at least 9 to 18 months to be fully complete”, the company said in a statement released on Monday.
It is the “only sustainable option” to ensure Harleys can still be sold in Europe.
“Increasing international production to alleviate the EU tariff burden is not the company’s preference, but represents the only sustainable option to make its motorcycles accessible to customers in the EU and maintain a viable business in Europe,” it concluded.
The news will come as a blow to Harley workers in the US, although it is not yet clear how many jobs could be at risk. Many of the jobs at stake could be at their Wisconsin plant, a state who voted firmly in favour of Trump in the 2016 presidential election on his promise to bring back jobs to America.
Shares in Harley-Davidson fell almost 2 percent in pre-market trading in New York, with traders estimating that the $100 million annual cost of Europe’s new tariffs is likely to hurt the group’s annual results.
