Harley-Davidson (NYSE: HOG), which has had to contend with spiraling costs from tariffs, says it will begin shifting the production of motorcycles headed for Europe from the U.S. to factories overseas.
The European Union on Friday began rolling out tariffs on American imports like bourbon, peanut butter and orange juice. The E.U. tariffs on $3.4 billion worth of U.S. products are retaliation for duties the Trump administration is imposing on European steel and aluminum.
Harley-Davidson sold almost 40,000 motorcycles in the Europe Union last year, generating revenue second only to the United States, according to the company.
The maker of the iconic American motorcycle said in a regulatory filing Monday that E.U. tariffs on its motorcycles exported from the U.S. jumped between 6% and 31%. The company said it expects the tariffs will result in an incremental cost of about $2,200 per average motorcycle exported from the U.S. to the E.U.
"Harley-Davidson maintains a strong commitment to U.S.-based manufacturing which is valued by riders globally," the company said in prepared remarks.
The company said that it will not raise its prices to avert "an immediate and lasting detrimental impact" on sales in Europe. Harley will instead absorb a significant amount of the cost in the near term. It anticipates the cost for the rest of the year to be approximately $30 million to $45 million.
Company shares slumped 88 cents, or 2%, to $43.33 soon after the opening bell on Monday.
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