Bike maker Harley-Davidson (HOG) withdrew its annual financial guidance on Thursday, citing uncertainty from tariffs.
Whereas Harley does most of its manufacturing in america, sourcing is “the place the large affect is,” CEO Jochen Zeitz stated. He famous that whereas the corporate’s sourcing and manufacturing are extremely US-centric, the 145% tariff price on imports from China is so steep that it nonetheless represents a “large whammy” for the corporate.
“So sooner or later, a commerce take care of China is vital,” Zeitz stated within the firm’s earnings name. “Whereas our publicity and our total spend … coming from China is effectively beneath 6%, 145% makes it so vital, which is why we have already … began to maneuver proactively product parts out of China, and we’re persevering with to take action.”
Harley said that the primary quarter direct affect from tariffs was restricted to $9 million; nevertheless, it estimates a $130 million to $175 million value affect from tariffs for the total yr.
Along with China, Europe is one other market Harley is watching. The European Union paused its focused tariffs on US bikes that have been levied in retaliation, and Zeitz stated he believes {that a} commerce deal will finally be inked earlier than these tariffs resume.
It stays to be seen if the escalating commerce tensions between the US and its buying and selling companions harm Harley’s quintessentially American branding overseas.
When it comes to the US market, the corporate famous that commerce limitations for overseas bikes could also be useful, giving it an edge over overseas motorcycle makers like Ducati and Honda. That was the case in 1983, when the Reagan administration imposed a forty five% tariff on imported bikes to assist Harley beat again overseas competitors.
