A few weeks ago, we talked about the Moto-Apocalypse that many analysts think will destroy the American market for motorcycles. And though the numbers for such a crash don’t seem to agree with the doom and gloom, a new prospect is threatening the motorcycle industry. Is this new danger something riders should worry about, or will it blow over like most industry crises?
Could a Trade War Destroy the Motorcycle Industry?
In response to what President Trump sees as unfair targeting of American enterprises, the President claims that he may impose new tariffs on certain imports. He claims that imported aluminum could see a 10 percent tariff while imported steel could see a 25 percent tariff. This has caused quite the stir in the international community.
European Commission President Jean-Claude Juncker has already said there will be retaliation if President Trump does impose such tariffs. He claims that a 25 percent tariff would be imposed on American goods such as bourbon, blue jeans, steel and agricultural goods produced in the U.S. as well as American motorcycles.
This news has an already troubled Harley-Davidson worried. With stagnant sales in the U.S., Harley has come to rely on its international sales for growth. The company is also at the center of the President’s arguments for these tariffs as the Indian 100 percent tariff on American motorcycles exported to the country caught Donald Trump’s eye during his campaign.
Since then, India reduced the tariff to 50 percent, but the President claims this is still too high. He is also threatening to match the 50 percent tariff on Indian motorcycles. This move could kill Royal Enfield’s attempt to start an American branch to sell motorcycles here in the U.S. It also complicates the situation with Harley-Davidson, since it built an assembly plant in India to avoid the tariff. Could further conflict threaten that plant, and Harley’s growing market share in India?
Potential steel and aluminum tariffs could also raise the price of other imported motorcycles all over the market, leaving many riders with no other choice than to turn to the used market to find their next ride. However, if foreign powers relent to the pressure from the President’s administration, we could also see some motorcycle prices come down. The attorneys who ride at Metier Law Firm will continue to watch this trade dispute, so you can know which way the motorcycle industry will turn next.