President Trump's latest tariffs could hurt non-US motorcycle makers

Hot on the heels of his meeting with President Putin and his summit with European leaders, President Trump has unleashed another round of tariffs, which again will affect foreign-built motorcycles.

The tariffs don’t specifically note motorcycles, and neither does the notice on the Federal Register (published August 19). It does, though, take aim at consumer items that are imported to the USA, which contain metals such as steel and aluminium.

Alongside motorcycles, the Section 232 tariffs will also affect things like tableware, locomotives, truck trailers and certain car parts. It also includes day-to-day items like microwaves, washing machines, fridge freezers and much more. It even covers much smaller items - such as makeup - that are sold in metal containers. It also covers, and specifically mentions, ‘automotive exhaust systems’, which are another part making up the reported $200 billion tariff round.

For fridge freezer makers, it’s maybe less of a big deal. But there is a lot of both steel and aluminium (among other metals) in the average motorcycle.

There is a small loophole that may help, in that if the steel or aluminium in question has been smelted in the USA, it can be exempt from the tariffs. That means some relief if manufacturers can source or certify their supply chain accordingly. For European factories already set up around EU steel and alloy suppliers, that’s easier said than done.

Because of this, non-US automotive makers have pushed for the department not to apply the tariff on so-called “derivative” steel and aluminium products. The argument for them is that the US doesn’t have the capability to deal with demand domestically. Doubling down on the worries for foreign makers is the fact that the new 50 per cent Section 232 tariff is on top of any non-steel and non-aluminium content country rate tariff.

While the European and Japanese bike makers are wondering what the future will bring for them, the US steel and aluminium industry is understandably more jovial. Bloomberg reports that Lourenco Goncalves, CEO of US steelmaker Cleveland-Cliffs Inc., has lauded the president’s move, thanking him for taking “decisive” action, and helping to deter what he calls “tariff circumvention occurring in plain sight”.

And this is likely not the last we hear of these types of tariffs. President Trump is likely to look to copper after semi-finished copper had 50 per cent added to it in July - again, there is a lot of copper used in motorcycle production. For European brands already juggling currency swings, emissions compliance, and supply-chain headaches, Washington’s latest trade play adds yet another variable.

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