Harley-Davidson may be affected by brewing trade war

If you’ve been paying attention to the news, you probably know that US president Donald Trump appears to be preparing for a trade war. Now, it appears Harley-Davidson may soon feel the impact of that conflict.

Motorcycles have already been one of the issues that have popped up in controversy over trade, with Trump saying he was unhappy with India’s tariff on imported Harley-Davidsons (India taxes them at 50 per cent, down from an earlier 100 per cent tariff; Indian motorcycles imported to the US supposedly have no import tariffs at all).

However, the latest news about a possible tariff on Harley-Davidson motorcycles comes not from India, but the European Union. It’s not in response to a tariff on EU motorcycles coming into the US (although that was hinted at last year). EU officials are suggesting there may be a tax on American products imported to Europe to fight back against the recently-announced US tariffs on imported aluminum and steel.

It’s a game of tit-for-tat, and one of the American products threatened is Harley-Davidson motorcycles (bourbon whiskey and Levi’s jeans were also on the draft list).

Should this happen, it could potentially be bad news for Harley-Davidson, as the Motor Company is doing its best to grow overseas business, and wants all the international sales it can find. Those international sales numbers have been weakening for a while, and the execs in Milwaukee certainly want to see a turnaround, particularly with ambitious projects looming like the new team-up with electric bike manufacturer Alta.

On the other hand, domestic sales could see growth if there’s a perception among American buyers that Harley-Davidson is suffering unjustly, potentially driving US interest away from Euro brands.

The EU hasn’t signed anything into law yet, so the rumored tariff may not ever happen. However, given the current unrest in global trade, we don’t expect this to be the last time we hear of potential motorcycle tariffs.