Harley-Davidson's shares hit 3-year high on EU-US trade truce
PremiumHarley's shares gained as much as 6.7% on Monday to $50.96, their highest level since January 2018. They were last trading up 6% at $50.62
Harley-Davidson Inc's shares soared to their highest level in over three years after the European Union decided to suspend a planned increase in retaliatory tariffs on its motorcycles as part of a partial trade truce with the United States.
The EU had threatened to double the tariffs on Harley's motorcycles, American-made whiskey and power boats to 50% on June 1 in retaliation for steel and aluminum tariffs imposed by former President Donald Trump.
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The European Commission, which oversees EU trade policy, said on Monday it would suspend the planned hike of retaliatory tariffs for up to six months.
Harley's shares gained as much as 6.7% on Monday to $50.96, their highest level since January 2018. They were last trading up 6% at $50.62.
While the company welcomed the EU's decision, it would continue to pursue legal challenges to a European court ruling that revoked a concession allowing it to ship bikes from the facilities outside the United States at a tariff rate of 6%.
"This is the first step in the right direction in a dispute not of our making," said Chief Executive Jochen Zeitz. "Harley-Davidson employees, dealers, stakeholders and motorcycles have no place in this trade war."
Following the EU ruling, Harley's bikes are now subjected to a 25% retaliatory tariff, increasing the overall duty on its bikes shipped to the European Union to 31%.
The Milwaukee-based company is betting heavily on Europe, its second-largest market after the United States, to help fuel its turnaround strategy. But higher tariffs would give its rivals including Triumph, Honda and Suzuki a massive pricing advantage.
The 118-year-old American brand had tried to escape the punitive measure by shifting the production of motorcycles for European markets to Thailand from the United States - a move that prompted Trump to ask his supporters to boycott the American brand.
However, a European court last month ruled that its bikes produced in Thailand would be treated as U.S.-made.
This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.
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