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Harley-Davidson Stock Soars After EU Drops Steel, Aluminum Tariffs

A weekend US-EU pact to end 'dirty steel' imports has lead to the removal of tariffs on products made by Harley-Davidson, sending shares sharply higher in pre-market trading.

Harley-Davidson  (HOG) - Get Harley-Davidson, Inc. Report shares roared higher Monday after the European Union dropped tariffs against the iconic motorcycle maker linked to a years-long dispute with the United States over steel and aluminum imports.

Under terms of a deal unveiled by President Joe Biden at this weekend's G-20 Summit in Rome, the U.S. will allow the EU tariff-free access to U.S. steel and aluminum markets so long as exports volumes are comparable to those prior to the levies imposed by the Trump administration in 2018.

The EU, in return, will drop retaliatory tariffs on a range of products it had targeted in the past, including A 31% levy applied to those made by Harley-Davidson. 

"Today's news is a big win for Harley-Davidson and our customers, employees and dealers in Europe. Our thanks go out to President Biden, Secretary Raimundo and the U.S. Administration, for their efforts in this negotiation," CEO Jochen Zeitz said in a statement Sunday. "We are excited that this brings an end to a conflict that was not of our making, and in which Harley-Davidson had no place."

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"This is an important course correction in U.S.-EU trade relations, that will allow us to further Harley-Davidson's position as the most desirable motorcycle brand in the world," he added.

Harley-Davidson shares were marked 9% higher in early trading Monday to change hands at $39.70 each. 

Harley-Davidson also repeated its 2021 guidance, calling for motorcycle segment revenues to rise by between 30% and 35% from last year, adding it sees "no incremental impact" from tariffs in 2022.