Harley-Davidson will not raise prices to cover tariff costs

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A biker rides his Harley-Davidson during a parade at the “Hamburg Harley Days” in Hamburg, Germany, on June 24. Reuters

(Reuters) – Harley-Davidson Inc said on Monday it would not raise retail or wholesale prices for its dealers to cover the costs of the retaliatory tariffs by the European Union on US products.

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The tremendous expense if passed onto its dealers and retail customers would have a lasting detrimental impact to its business in the region, the company said in a regulatory filing.

Harley-Davidson said tariffs would reduce customer access to its motorcycles and hurt the dealers’ businesses.

Last week, the European Commission said it would start charging import duties of 25 percent on a range of US products after Washington imposed tariffs on EU steel and aluminium at the start of June.

The company sees an annual impact due to the tariffs of about $90 million to $100 million and expects an incremental cost of about $2,200 per average motorcycle exported from the United States to the EU.

The company expects the incremental cost for the rest of 2018 to be $30 million to $45 million.

Harley said it plans to shift production of motorcycles for EU destinations from the United States to its international facilities to avoid the tariff burden.

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