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No Profit For Harley-Davidson Because Of Trump Tariffs

Harley-Davidson Inc is already considered an icon in America when it comes to producing motorbikes. The company has also venture to motorbike protective clothing and other accessories yet the last quarter was not a good one for them as they almost did not even reach the breakeven point. This is because of the challenges they had to face with the trade wars that were initiated by US President Donald Trump. The shares of the motorcycle manufacture took a dive as the highest recorded since.

The manufacturer which is headquartered in Milwaukee revealed that for the fourth quarter, their earnings per share determined by the GAAP was zero. They were able to make a profit of 17 cents for every share but this is before the tariff and restructuring costs. This is lower compared to the average estimate of the analysts which is at 29 cents.

The previous year, President Trump started his tirade against Harley-Davidson due to the announcement made by the company that it is going to transfer a number of its local production to other countries in order to save from the levies they have to pay as mandated by the European Union. Looking at the bigger picture, angry tweets and tariffs imposed are not the only driving force behind the slow performance.

It also has to do with the fact that their retail sales in the United States are not as good as it has declined by 10 per cent from October to December. The last quarter of 2018 was the eight quarter in a row that the sales have dropped.

Matt Levatich, the CEO of the motorcycle maker, said that they are struggling to attract the new generation to try riding. Therefore they have decided to put into the market cheaper motorbikes as an alternative along with motorcycle clothing and gear. These products can also be ordered through the Amazon website in order to gain new customers.

Levatich said that the shift to motorbike protective clothing and accessories will offer relief as the company is expected a rougher year ahead of them. They are waiting for big initiatives such as More Roads to be launched in order to take the necessary actions.

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