Harley-Davidson (HOG) stock opened Monday’s regular session lower and remained throughout the day in the negative territory. The shares were hurt by President Donald Trump’s support for snubbing the firm if production is shifted to overseas. The company has been facing the brunt of the tariffs on steel and aluminum.
Trump has taken the Twitter to express his grief over the iconic bike manufacturer’s plan to move production abroad in order to avoid heavy tariffs. This comes a day after the POTUS hosted Bikers for Trump supporters at his golf club in New Jersey.
Many @harleydavidson owners plan to boycott the company if manufacturing moves overseas. Great! Most other companies are coming in our direction, including Harley competitors. A really bad move! U.S. will soon have a level playing field, or better.
— Donald J. Trump (@realDonaldTrump) August 12, 2018
In June, Harley intended to move certain motorcycle manufacturing farther from the US. But the company hasn’t decided on the location as it has got four assembly plants outside the US: Brazil, Australia, India, and Thailand. The company is struggling to avoid the considerable load of the European Union tariffs that could have an annual impact of $90-$100 million.
The EU had lifted export tariffs on motorcycles that come from the US to 31% from 6%, effective June 22, 2018. The decision of Harley to move from the US received sharp criticism from Trump. Europe remains the second-largest market for Harley.
Anxiety prevailed between Harley and the Trump administration for months as most of the other automakers have agreed with Trump’s decision to impose tariffs on steel and aluminum imports to boost domestic production. Harley has been striving hard with the trade war as demand for motorcycles in the International market has been on the upward swing despite lesser demand in the US.
Related: Harley-Davidson rides on overseas sales, tops market estimates
During the recently completed second-quarter, Harley benefited from overseas sales despite a 3.3% decline in revenue. Lower shipments, costs from manufacturing optimization initiative, and higher operating expenses dragged revenue down. International retail motorcycle sales inched up 0.7% in Q2 but US retail sales were down 6.4%.
Shares of Harley ended Monday’s regular trading session down by 4.35% at $41.38 on the NYSE. The stock has dropped more than 18% year-to-date and more than 12% in the past year.