An American Icon Falls Victim To Trade Wars
Dear Rundown Reader,
Step one: Revive American manufacturing and put more people back to work.
Sounds great. But it’s harder than it looks.
Due to retaliatory tariffs enacted by the EU, Harley-Davidson will now shift some of its manufacturing abroad.
It’s the first iconic American brand to buckle under trade war pressure.
But is it good for Harley-Davidson? Today’s Rundown shows you what’s what.
Your Rundown for Tuesday, June 26, 2018…
Harley Shares Sink As EU Announces New Tariffs
Synonymous with the open road and American freedom…
Now Harley-Davidson (NYSE: HOG) is in trouble thanks to the latest trade war salvo.
Monday The Wall Street Journal reported the iconic motorcycle company will shift some of its manufacturing operations abroad.
Yahoo Finance says HOG’s move is in response to “tariffs enacted by the EU” which increases the “duty paid by Harley Davidson’s Europe-bound bikes made in the U.S. to 31% from 6%.”
This equates to an average cost increase of $2,200 per motorcycle.
HOG execs also note the move will occur over the next 9-18 months.
This after HOG announced plans to close a factory in Kansas City and consolidate production at plants in Milwaukee and York, PA, earlier this year, as reported by The Wall Street Journal.
This news… did not go over well. The HOG shares fell 6% on Monday.
If you were waiting for the moment when Trump’s trade policy hit home, this is it.
For HOG the move makes sense. At least in principle.
According to The New York Times, Europe is second to only the United States as Harley-Davidson’s most important market.
But who gets hurt? American workers.
The toothless and ineffective UAW cannot stop more production cuts and eventual job losses.
HOG, in a sense, continues to rearrange the deck chairs on the Titanic. Their business is dying and they will eventually go the way of Sears.
It doesn’t matter where the bikes are assembled or how high the tariffs may be.
HOG’s headed for the slaughterhouse.
America first. Harder than it looks.
Now, turning to the markets this morning…
Market Rundown for Tues., June 26
Yield on the 10-Year Treasury sits at 2.871% this morning, down 0.004.
S&P 500 futures are down 2.75 at 2,719.
Oil’s down up $0.19 at $68.27.
Gold’s down $11.10 to $1,257.
Bitcoin goes for $6,213 this morning, according to CoinDesk.
We’ll talk again tomorrow.
For the Rundown,