Common Tread

Motorcycle manufacturers worried about trade war rhetoric

Mar 08, 2018

Motorcycle manufacturers are speaking out against new tariffs and trade wars in general even as elected officials appear to be digging in their heels.

As we reported last week, President Donald Trump has proposed tariffs on imported aluminum and steel and European Commission President Jean-Claude Juncker threatened to respond with retaliatory tariffs on some U.S.-made goods, including Harley-Davidson motorcycles. Since then, the rhetoric has not softened. Yesterday, Juncker went further, saying retaliatory tariffs are "basically a stupid process... But we have to do it. ... We can also do stupid."

Positions appeared to harden in Washington, as well. National Economic Adviser Gary Cohn, an opponent of the tariffs, resigned his position with the Trump administration, leaving less internal opposition to the president's plans.

Motorcycle manufacturers, alarmed by the prospect of a trade war, are speaking out. The European Association of Motorcycle Manufacturers (known as ACEM for its French acronym), of which Harley-Davidson is a member, issued a statement saying it is "deeply concerned."

"The U.S. and the EU should be working together to facilitate international trade and regulatory convergence, not to restrict it by adopting unilateral and politically motivated measures,” said ACEM President and KTM CEO Stefan Pierer. ACEM Secretary General Antonio Perlot added that “a global trade escalation ... could be extremely damaging for the motorcycle industry on both sides of the Atlantic.”

Harley-Davidson stated that tariffs on steel and aluminum would increase its costs and that retaliatory tariffs by other countries would have a significant impact on the company. Similarly, Scott Wine, CEO of Polaris, maker of Indian motorcycles, told the Wall Street Journal that not only would the tariffs proposed by the president increase the company's costs, but an all-out trade war would likely lead to layoffs at Polaris. Wine said that result would not be consistent with Trump's efforts to create U.S. jobs.

Separately, Trump had also singled out imported motorcycles from India as an example of unfair trade, because India puts a 50 percent tariff on large imported motorcycles. Royal Enfield North America, currently in the process of rolling out its new Himalayan adventure model, also responded in careful language:

"At Royal Enfield we try our best to focus on motorcycling and stay out of politics. However, as a company with a rich history in both India and North America, we absolutely pay attention when sensationalistic statements are made that affect the motorcycle community. With the motorcycle market in the U.S. experiencing its third consecutive year of decline, and with actual imported motorcycle numbers significantly lower than what is being reported in the media, we firmly believe any tariff or duty on imported Indian motorcycles would only hurt the U.S. motorcycle industry. Motorcycling is our passion — and it should be accessible to anyone who wants to experience the joy of riding."

Some news reports said Trump could take action on the steel and aluminum tariffs as soon as today, despite opposition from his own party.