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When it comes to symbolism, it seems no products are more American than bourbon and Harley-Davidson motorcycles. At least it feels that way — because when talk of trade wars and retaliation starts up, as it is right now, whiskey and motorcycles get targeted.
When president-elect Donald Trump recently talked about putting a 25% tariff on all goods entering the United States from Mexico and Canada as a way to pressure the neighboring countries on border issues, Canadian Prime Minister Justin Trudeau mentioned the last round of trade policy retaliation in 2018 during the first Trump administration, when Harley-Davidson motorcycles were targeted, along with other American products. With Trump threatening tariffs on a variety of countries, should Harley-Davidson be worried?
Well, maybe. A little. But let's try to look at this without some of the far-too-common "Oh my God Harley's doomed" hyperbole.
In 2023, 60.5% of Harley-Davidson's retail sales of motorcycles were in the United States. The Asia Pacific region and the EMEA region (Europe, Middle East, Africa) each accounted for just under 17% of sales. In case you're wondering about that emerging spat with Canada, 4.6% of sales were made north of the border, or 7,422 motorcycles.
In the first Trump administration, Harley-Davidson got dragged into a dispute with the European Union when the U.S. government imposed tariffs on steel and aluminum. The EU threatened to slap a 56% tariff on Harleys, which the company estimated would have cost it at least $200 million a year.
Harley-Davidson initially got around the tariffs by shipping motorcycles built at its Thailand plant to Europe and saying they weren't from the United States. That won't work in the future, because an EU court ruled against that approach and, in any case, the EU can always just put tariffs on a company's products regardless of where they are produced.
In the end, the trade dispute was resolved after the Biden administration took over.
Since the scenario is different this time, with the president-elect talking about tariffs on goods from China, Canada, and Mexico, in addition to the EU, the events from the first Trump administration may not be all that helpful in guessing what will happen this time. But with Harley-Davidson and other companies already revising downward their sales projections for this year, new tariffs won't help.
And then there's another potential twist that's even more speculative. What if Harley-Davidson got hit by tariffs from the other direction? As we reported earlier this year, for the first time ever Harley-Davidson will be building motorcycles outside the United States that will be sold in the U.S. market, specifically its Revolution Max models, the Pan America, Sportster S, and Nightster. That's a change of policy because previously the motorcycles built at plants abroad were destined only for foreign markets.
What if the Revolution Max models built in Thailand get slapped with a tariff by the Trump administration? It's not groundless speculation. In his first administration, Trump threatened to do exactly that.
....When I had Harley-Davidson officials over to the White House, I chided them about tariffs in other countries, like India, being too high. Companies are now coming back to America. Harley must know that they won’t be able to sell back into U.S. without paying a big tax!
— Donald J. Trump (@realDonaldTrump) June 26, 2018
As I've said before, Trump is more of a limousine kind of guy than a bagger kind of guy, and he doesn't appear to pay much attention to or know much about the motorcycle industry. Understandably. He certainly has bigger issues to deal with. But if someone whispers in his ear that Harley-Davidson is building motorcycles in Thailand to sell to U.S. consumers, it's not hard to imagine that old threat from six years ago being resurrected.
I contacted Harley-Davidson to ask if the company wanted to comment on these issues but did not get a response.
Listen, because of the company's symbolic prominence, there tends to be too much hysteria all around when it comes to discussions of Harley-Davidson. I noticed a headline on another motorcycle web site that literally asked "how long can it survive" on a story about the company, despite a down quarter, posting a profit — not a loss, a profit — of $119 million for the three-month period. Then you have outrage-farming YouTubers who, for their own personal gain, attack the company for being too "woke" and you have legions of other people loving and hating the company beyond reason... just because it's Harley-Freakin'-Davidson, y'all.
Setting aside the overreactions, it's not hype, however, to say that new tariffs and resulting retaliatory measures could add one more headwind (or headache) for the U.S. motorcycle company with by far the most international sales. When foreign governments go looking for a juicy, symbolic, American target, it's easy to think of a Harley-Davidson.
