China says “door is open” for trade talks with the USA

The motorcycle manufacturer Harley-Davidson (HOG) withdrew his annual financial guidelines on Thursday, citing customs uncertainty.

While Harley carries out most of his production in the United States, the procurement is “where the big influence”, said CEO Jochen Zeitz. He found that the procurement and production of the company are strongly centered in the United States, the tariff rate of 145% for imports from China is so steep that it is still a “bighamty” for the company.

“At some point, a trade agreement with China is of crucial importance,” said Zeitz in the company's profit call. “While our exposure and our total editions … are well below 6% from China, it makes 145% so significant, which is why we already … Proactive product components from China, and we continue to do so.”

Harley said that the direct effects of the first quarter were limited from the tariffs to 9 million US dollars. However, it estimates the effects of the tariffs of 130 to 175 million US dollars for the entire year.

In addition to China, Europe is another market that Harley is watching. The European Union held its targeted tariffs on US motorcycles that were raised for retaliation, and Zeitz said that he believed that a trade agreement will ultimately be colored before these tariffs are resumed.

It remains to be seen whether the escalating trade voltages between the USA and their trading partners damage Harley's typical American branding abroad.

With regard to the US market, the company found that trade barriers for foreign motorcycles can be advantageous, which gives it an advantage through foreign motorcycle manufacturers such as Ducati and Honda. This was the case in 1983 when the Reagan government imposed a tariff of 45% on imported motorcycles to help Harley resigned foreign competition.