How tariffs could knock Harley-Davidson off course

Harley-Davidson (HOG) is among the most iconic of American brands, with its signature throwback motorcycles as growling emblems of personal freedom. Now, the manufacturer faces a new test: roaring ahead despite President Donald Trump's "buy American" policy.

Mr. Trump highlighted that ethos on Thursday in officially imposing steep tariffs on steel and aluminum imports, which he says is necessary to ensure fair trade with other countries. But for Harley, the levies couldn't have come at a worse time.

The company has struggled in recent years with declining sales and rising costs. In January, it announced plans to close its Kansas City plant, laying off 800 workers, and consolidating operations at three other manufacturing facilities. Reflecting that slowdown, Harley-Davidson shares have plunged nearly 13 percent this year, far underperforming the S&P 500 index.

For Harley, whose executives visited the White House last year after Mr. Trump's election, raising tariffs on steel is likely to sting. Wedbush Securities estimates the company's costs could rise as much $30 million annually because of the steel tariffs, noting that domestic steel prices are also likely to rise as foreign imports falls.   



Source :- cbsnews

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