Depth report

　　

Harley Davidson, a well-known American motorcycle manufacturer, became the first company to raise the white flag in the context of the trade conflict. In a securities report on June 25, the company stated that in accordance with the EU’s official policy of raising tariffs on imported motorcycles from the United States on June 22, it is expected that the cost of every Harley motorcycle exported from the United States to the European Union will be An increase of 2200 dollars.

      Harley said in the report that it will not increase retail or wholesale prices, but plans to move more production overseas. On June 25, Harley-Davidson's share price plummeted, plummeting nearly 6%, and the share price has fallen by more than 18% this year.

 According to a report submitted by Harley to the US Securities Regulatory Commission, the EU's tariff on imported motorcycles from the United States has risen from 6% to 31%. Halley stated in the report that due to tariff hikes, production will not be transferred to Europe. The report pointed out that Harley will transfer production to these overseas regions to offset the impact of the EU's retaliatory tariffs on certain US products. Currently, Harley's overseas manufacturing plants are mainly located in Brazil, India, Australia and Thailand. However, the statement did not indicate where the production line will be transferred. Harley predicts that it will take at least 9 to 18 months to complete the additional investment in production equipment.

      Trump was disappointed by Harley's measures. Earlier, he publicly thanked Harley Davidson for "production in the United States" and criticized other companies for production outside the United States. Unexpectedly, now he was "slapped in the face" by Halley.

      In fact, Harley’s behavior of raising the white flag was also due to a reason. Last year, Harley sold about 40,000 motorcycles in Europe, accounting for 16% of the entire overseas sales. The European market is also the largest market outside of Harley’s US market. According to the Wall Street Journal, Harley’s international sales increased by 0.2% in the first quarter of 2018, the first increase in more than a year. Harley hopes to increase its international business to half of its annual sales within the next ten years, which is currently about 40%. In the first quarter, sales in the US market fell by 12%, continuing the downward trend in recent years.

      In this trade dispute, Harley is not the only manufacturer to "success". According to a CNBC report citing Moody’s Investor Services, the tariffs proposed by the United States for imported cars will have a profound negative impact on the entire automotive industry. It will not only affect cars produced in EU and other countries, but will affect the entire automobile industry. The global supply chain of the automotive industry has an impact.

"The imposed tariffs will have an adverse effect on both Ford and GM. The burden on GM will be even greater because GM has greater dependence on imports from Mexico and Canada, and these imports will support its overall operations in the United States," the report “In addition, a considerable part of GM’s high-margin trucks and SUVs comes from Mexico and Canada. Both GM and Ford manufacturers need to digest the reduction in production in Mexico and Canada and transfer part of their production back to the United States. The resulting cost increase."