Harley-Davidson looking at ‘all options’ to deal with tariffs

Harley-Davidson 2Q earnings top estimates

Third Seven Advisors Managing Director Michael Block and FBN’s Dagen McDowell break down Harley-Davidson’s second-quarter results.

Harley-Davidson is eyeing different ways to supply motorcycles to the European Union out of three international facilities, as the company looks at “all options” due to the increased costs the company is expecting from the recently enacted tariffs.

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“We are making “every effort” to mitigate the costs of EU tariffs,” Harley-Davidson CEO Matthew Levatich said on a conference call on Tuesday.

Harley-Davidson said that as a result of recently enacted tariffs it expects to incur about $45 million to $55 million in increased costs, which includes incremental costs of about $15 million to $20 million for steel and aluminum and about $30 million to $35 million from European Union tariffs.

The iconic American motorcycle maker is analyzing capacity options, manufacturing costs and supply-chain logistics to reduce and mitigate EU tariffs. If there is no mitigation of EU tariffs, they would cost the company $90 million to $100 million in 2019.

The company also said that for the full year it continues to expect retail sales to decline in the U.S. while international retail sales are expected to grow.

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