Harley-Davidson takes a stand against Donald Trump and warns of European countermeasures

2023 Author: Nicholas Abramson | [email protected]. Last modified: 2023-09-01 00:14

In case you haven't heard yet, an industrial war is brewing in the United States that could affect the entire world. We recently told in Motorpasión that Donald Trump was planning to impose a 25% tariff on steel and 10% on imported aluminum., regardless of its origin, to encourage the North American steel industry.

Well, this attempt at protectionism that could have a positive effect in the short term could turn against itself by looking a little further afield. If the price of imported metals rises, American steel companies would be tempted to raise the price of your products simply because they can do it since they have the assured demand, regardless of the price. And that hurts us all.

A measure that can harm Harley-Davidson at the least opportune moment

The increase in the price of the raw materials with which cars and motorcycles are mainly manufactured would directly translate into an increase in the final price of the products, transferring that extra cost to the final consumers as ensured by the American Automotive Policy Council (AAPC) that includes General Motors, Ford and Fiat-Chrysler.

The response from the old continent has not been long in coming, and Jean-Claude Juncker (President of the European Commission) has confirmed that if the United States starts this trade war, Europe will impose tariffs of up to 25% in products like bourbon, textile garments and, yes, Harley-Davidson.

With the auto industry wary of the golden blonde measures, Harley-Davidson has also been slow to run against it as well. According to the Miwaukee Journal Sentinel, despite the usual political silence at the American firm, Harley-Davidson has been very blunt in considering the White House measures as a direct affront to their interests.

Harley-Davidson's sales are losing steam year after year, they have laid off a good part of the workforce and are moving towards the electric field, even investing in Alta Motors as a helm to a policy of product until now immobilista that happens to lead the first genuinely American 100% electric motorcycle on the market. It is logical that losing a good part of sales in Europe due to a trade war they did not find it funny.

"Tariffs on steel and aluminum will raise the price of all products, regardless of where the raw material comes from," Harley-Davidson said in a statement. "If we add to this a tariff in certain foreign markets we will have a significantly negative impact on our sales, our distributors, our suppliers and of course against the customers of those markets."

Harley-Davidson's bulk of sales may focus on the domestic stars and stripes market, but any market, no matter how small, counts, and the European part accounts for 16% of the firm's sales pie. The oar stroke against the back of the American firm would be double: on the one hand, they would see the price of their motorcycles rise in the United States, contracting their domestic demand; on the other, to this price increase, a tariff would be added that would leave a comparatively aggrieved offer in its foreign market.

As usual, in the end the the biggest loser is the end customer since if you want to access a certain product you have to go through the hoop, but in this case the symbolic tariff on Harley-Davidson exports (it is not the brand that sells the most in Europe) could be a coup de grace for the company. critical situation of the Milwaukee manufacturer.

Trade wars that benefit no one

Worst of all is that in this macroeconomic Russian roulette always righteous pay for sinners. Donald Trump's initiative is based on wanting to stop the excessive supply of metals from China that is driving down the prices of raw materials in the global market and in a retaliatory game ends up affecting fans of European motorcycles.

It's not the first time that Harley-Davidson has to face a similar situation. When former President George W. Bush imposed taxes on imported steel in 2003, custom companies already had to eat a tariff to reach Europe. In India they have only been able to save themselves from a 100% tax, taking part of the production to the Asian subcontinent in 2011. More of the same in Thailand, where to avoid a 60% tariff they are considering opening a factory.

To this must be added a demographic change in which the traditional customers of the American brand belong to a generation of which there are fewer and fewer motorists capable of carrying a large and heavy motorcycle; in return, the new generations are less and less interested in traditional products in favor of others more related to innovation and technology, leaving Harley-Davidson out of the game for both bands.

For 2018, the brand's expectations are even less promising. If in 2017 they closed with a figure of 241,498 motorcycles sold globally, the forecasts for this campaign are between 231,000 and 236,000 units, the minors for 6 years.

Not long after, the terms in which the oval office wants to play this macabre game of chess will be known. Let's hope they don't turn a deaf ear to the warning voices coming from the industry for the good of all, including the fans.