Harley-Davidson may face credit downgrade because of European Union tariffs

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Harley-Davidson may face credit downgrade because of European Union tariffs

The EU's hike in tariffs was introduced as a retaliatory move in reply to Trump's price hike on imported aluminium and steel into the US.

Harley-Davidson shares closed down 0.6 percent at $41.32, after falling almost 6 percent on Monday. "Their employees and customers are already very angry at them", Trump said on Twitter, without providing any evidence.

Harley-Davidson announced in January it would close its Kansas City, Missouri assembly plant and consolidate jobs in York, Pennsylvania.

Says Trump: "That was long before Tariffs were announced". If they move, watch it, it will be the beginning of the end. "I was the one that explained to Harley about 100 per cent tax in India. and I got it down to a much lower number. which is, I think, 50 per cent, which is far too much, but they were paying 100 per cent".

Meanwhile, in order to intensify its sanctions against Iran, the United States has ruled out any exemption to India and Indian companies from carrying out any transactions with Iran.

Harley-Davidson said it had no comment on the president's tweets.

Soon after the company's announcement, Trump weighed in with typical bombast.

It was a stark contrast from February 2017, when Harley-Davidson executives visited Trump at the White House, even participating in a photo-op with Trump. The EU raised an existing tariff it had on the company's motorcycles by nearly five times in retaliation for the U.S.' tariffs on EU aluminum and steel.

As U.S. customers age and loyalty to the brand wanes, Harley-Davidson has been aiming to make up for falling U.S. demand by boosting overseas sales to 50 percent of annual volume from about 43 percent.

Harley-Davidson said the move overseas was to avoid European Union tariffs, not to sell in the U.S. market. Morningstar Equity Research said in a note that the tariffs might "temporarily" hamper some of the company's planned growth initiatives.

Harley-Davidson executives met with President Trump at the White House past year after President Trump canceled a visit to the company's headquarters in Milwaukee because protests had been planned. "Taxes just a Harley excuse - be patient!" Trump said on Twitter.

On June 15, we all heard how Harley-Davidson is considering ramping up production overseas to keep costs down if the Trump Administration's disastrous tariffs go into effect.

The company is only the latest targeted by Trump for various reasons.

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