Since the first of the year we’ve been hit with news that Mack’s Titan heavy hauler, EBR’s sport bikes, and Victory’s cruisers were being discontinued. Volvo’s sacrifice of the Mack Titan was seen as yet another cut into the heart of the Bulldog, until Volvo sacrificed their own VTX heavy hauler, further swelling the body count. EBR’s current owners looked to be just assembling a few bikes from parts so no big deal, except they announced the factory’s tooling and machinery would be up for sale. Given that Polaris’ Indian brand has Harley on the run in a shrinking market, it may not have made sense to keep building in house competitor Victory. OK, almost makes sense.

Then the real felony level assault came on the 20th, with failed businessman and reality TV show host Trump exploiting a legacy vulnerability in the constitution to become president, despite having lost the election. Trump’s reality TV show moved to a new set in the White House, and kicked off their season with a flurry of orders, none well thought out. Amongst these edicts was one ordering the building of a wall along the Mexican border, billed to Mexico. Mexico promptly refused the charge, forcing Trump to substitute a 20% surcharge on Mexican imports to the U.S., charged to the importing company and of course passed on to the consumer. Trump has been whining about imports from China, Europe, and even Canada as well as Mexico, and threatening even higher tariffs in the 35% to 45% range.

Now a president has the power to create “emergency” tariffs all by himself, and “emergency” is not well defined. So we can full well expect some tariffs, and it isn’t just Trump that’s been afflicted by this epidemic of tariff fever- Republican congress members have been throwing around the 20% number too. Twenty percent… “That ain’t much, I’ll just buy American”, you say. If only it were so- The highest domestic content on any new car or light truck is around 80%, which means Trump and his GOP chorus get to add 4% to the price of your “Made in America” car or truck. That’s another thousand or three dollars price increase. Looking at a new GM or Fiat Chrysler pickup? There only around 50% domestic content, at a 20% duty figure on a $3k to $7k price increase. Looking for a new VW Golf or Jetta to replace your TDI? Zilch domestic content, so figure on a $5k price increase, guess we’ll keep our dirty diesels instead. Are you an environmentalist, looking at a hybrid or electric? Almost all of them have near zero domestic content, thus adding thousands in tariffs that could eat up any electric/plug in hybrid tax credits.

It gets worse… American made motorcycles are pretty much cruisers, forcing the other half of us riders to buy imports. When Trump and his GOP add 20% to the price of a BMW or Gold Wing or metric cruiser, silent factories that once built  EBRs and Victories could be busy again. Same in the truck biz, where market leader Daimler and International too are building a lot of their trucks in Mexico. Volvo builds engines and transmissions here, and assembles most all their trucks for the American market here too… That might come in handy.

But I’m just engaging in wistful thinkin’, in reality even a 20% duty on imports would be a disaster. Australia, Brazil, and a few other South American countries tried that… And were stuck with Falcons for half a century and aircooled VW engined motorcycles. For the U.S., 20% tariffs would force carmakers to discontinue economy models that working families rely on, restricted options on everything else, and wholesale layoffs through the whole automotive, truck, and motorcycle biz as sales drop in response to tariff driven price increases.

And that most American of motoring icons, Harley-Davidson? Maybe bankruptcy liquidation…

 

 

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