Trade War Tariffs To Impact Motorcycle Industry

President Trump has announced on Friday, August 1, that the final $300 billion worth of products on China List 4 would be subjected to an additional 10-percent tariff starting on September 1, 2019. Many of these products happen to be safety and recreational items including helmets, rain gear, bike covers, parts, accessories, and motorcycles that fall between the 80cc–500cc range. The fear is that these tariffs will not actually have the intended effect of forcing China to cover the extra cost, instead the concern is that consumers will be faced with increased prices on these items.

Related: Tariffs Could Devastate Motorcycle Industry

China has already responded by devaluing the Yuan to its lowest rate in over ten years in retaliation. This move signifies China’s stance that it may not be willing to agree with any type of revised trade deal with the US moving forward. From the motorcycle consumer’s point of view, this is not good news as we will likely be facing increased costs on consumable items and vehicles by the end of 2019, and additional ramifications from a US-China trade war including stock market declines as the world braces for a prolonged battle between the two nations.

"In June we testified in opposition to these proposed taxes," said Scott Schloegel, MIC senior vice president for government relations. "Despite White House rhetoric, the taxes are not paid by China, they are paid by companies doing business in the United States and by American consumers. The administration has already placed 25 percent taxes on all other goods coming in from China, and taxing helmets and other safety gear would be dangerous for the riding public."

On a positive note, the United States Trade Representative Office (USTR) announced last week that they planned to exempt mopeds and motorcycles under 50cc from the 25-percent tariff on China List 2 products. This is a sign that the USTR might heed the warnings levied by the Motorcycle Industry Council and exempt some of these products, but we will need to wait and see how it all plays out.

"We are hopeful that the USTR will find our testimony from June to be compelling, and they will exempt many of the powersports HTS codes captured under China List 4," Schloegel said in the MIC press release.