Harley-Davidson expects a 9 to 10 per cent hit to its profits. Photo/Bloomberg.
Harley-Davidson expects a 9 to 10 per cent hit to its profits. Photo/Bloomberg.
Some of the largest companies in America are reporting this week they are suffering the sting of the Trump administration's trade war, sounding alarm in an otherwise prosperous economy.
General Motors said Wednesday that it has lowered its outlook for 2018 earnings in part because of significant increases in thecosts of raw material. GM's stock fell more than 6 per cent during early morning trading. Trump imposed tariffs on aluminium and steel - major components of cars - earlier this year.
Harley-Davidson said Tuesday that it expects its operating margin as a per cent of revenue to hit 9 to 10 per cent because of the impact of the tariffs, down slightly from last year. And Whirlpool, which was supposed to benefit from Trump-imposed tariffs on foreign-made washing machines earlier this year, reported Tuesday that it did not make its second-quarter earnings estimates as steel prices rose 50 per cent.
On a company earning's call, Whirlpool chief executive Marc Bitzer said steel costs worldwide have "risen substantially. "
"And in particular in the US, they have reached unexplainable levels," Bitzer said.
The tariffs Trump imposed in January on foreign washing machines were celebrated at the time by Whirlpool, which had been losing market share to its Korean competitors LG and Samsung.
But that was six months ago. Since March, Trump has levied billions of tariffs on steel and aluminium imports from China, Canada, Mexico, the European Union, Japan and other nations. He is also threatening to impose tariffs on cars and uranium.
Trump argues that the tariffs will right years of unfair trade policies.
Many of the affected countries have imposed retaliatory tariffs of their own. For example, China announced it will impose tariffs on imports of American soybeans and buy more from Brazilian markets.
On Tuesday, the White House announced a US$12 billion (NZ$17.6 billion) emergency aid bailout to farmers caught in the escalating trade war.
Trump shows no signs of backing down. On Wednesday morning, he took to Twitter again, saying, "Are we just going to continue and let our farmers and country get ripped off? "
"Every time I see a weak politician asking to stop trade talks or the use of tariffs to counter unfair tariffs, I wonder, what can they be thinking?" he wrote.
