HOW WILL TARIFFS IMPACT POWERSPORTS

There has been a lot of discussion about President Trump’s proposed tariffs on foreign products, and many news outlets aren’t reporting that these are reciprocal tariffs meant to balance (or counter) trade imbalances with other nations. For example, Trump proposes a 25% tariff on goods from the European Union, in response to the existing EU tariff of 39% on American products exported to the EU. So, even if the EU tariff is enforced, the USA is still getting short-changed in the world of “free trade” with the EU. In all, 90 countries have tariffs on American goods, including our nearest neighbors, Canada and Mexico.

President Trump seeks to bring American manufacturing back to America, and imposing tariffs on companies operating in other countries is a long-term strategy to bring those companies’ production back to the USA (in 2018, he imposed tariffs on China, which President Biden continued). Also, its short-term benefit is Government revenue. Since Can-Am is a Canadian company with factories in Mexico and Polaris also has production in Mexico, how will tariffs affect the price of their new ATVs and UTVs? Or CFMoto and others, which assemble ATVs/UTVs here with foreign-made components? Here at UTV Action Mag, we’re enthusiasts, not economists, so we registered for a symposium by the Motorcycle Industry Council on the “Tariffs Update – What We Know and How it Will Impact Powersports.” Here’s a summary of what the MIC had to say.

Powersports Industry Overview

• The powersports industry has a $50.9 billion economic impact annually, including motorcycles, ATVs, and side-by-sides.
• About 1.25 million vehicles sold yearly, with 10,700 retailers and 116,000 employees generating $5 billion in payroll.
• The annual Capitol Hill Powersports Fly-in allows industry members to share their concerns and priorities with lawmakers, reaching nearly 100 congressional meetings across 39 states in a single day.

Tariffs: Explanation and Recent Developments

• Tariffs are taxes on imports, paid by U.S. importers and consumers, not by exporting countries.
• Significant increases in tariffs have occurred, particularly targeting imports from China, with rates rising to 145% on some goods, dramatically increasing consumer costs.
• The Trump administration has shifted from Section 301/232 processes (which involve reviews and opportunities for exclusions, taking up to 270 days) to the International Emergency Economic Powers Act (IEEPA), enabling unilateral emergency tariff imposition without industry or congressional input.
• President Trump also imposed tariffs on steel, aluminum, and automobiles, and threatened reciprocal tariffs based on host country rates, which led to market volatility and rapid policy reversals.

Economic and Political Impacts

• New tariffs led to retaliation from other countries: Canada (25% on motorcycles), China (125% on U.S. exports), and the EU (25% on some U.S. goods).
• The stock market has experienced significant volatility, with over $10 trillion lost since the new tariffs were introduced. This outcome conflicts with administration promises to lower costs and reduce inflation.
• Supply chain disruptions are already being felt; some companies are pausing imports from China and other affected countries.
• Congressional tension is rising over executive authority to impose tariffs under IEEPA, with lawsuits challenging the administration’s use of emergency powers for trade policy.
• The administration’s endgame appears split: some advisors prioritize revenue generation from tariffs, others want to force one-off trade deals to improve market access.

Global Trade Negotiations and Strategic Dynamics

• The U.S. is negotiating with up to 90 countries, aiming for new trade deals during a 90-day tariff pause, which experts agree is an extremely ambitious timeline.
• Japan and India are identified as likely to reach early agreements, though with limited scope.
• The EU presents challenges due to multiple member states’ interests and reluctance to decouple from China.
• China possesses strategic leverage through rare earth minerals and large U.S. debt holdings, but both U.S. and China risk self-harm through aggressive economic measures.
• S. manufacturing output has grown in value, despite a decline in manufacturing jobs; technological advancement and higher-value production dominate.
• Government efforts to rebuild U.S. manufacturing include potential extension of the Tax Cuts and Jobs Act and targeted industry incentives, though broad tariff exemptions are currently not on offer under IEEPA.

Advocacy Strategies and Industry Engagement

• The MIC and industry leaders recommend two main strategies for members: use the automated “Contact Congress” tool to oppose tariffs, and invite lawmakers to visit local businesses during congressional recesses.
• Direct constituent engagement is shown to amplify industry concerns in congressional offices and can impact legislative attention and policy.
• Industry-wide vocal opposition risks administrative retaliation, emphasizing the importance of targeted advocacy.
• Additional resources and guidance are available through the MIC and related trade associations, with continued advocacy encouraged via newsletters and legislative outreach.

Suggested Action Items

Utilize MIC’s “Contact Congress” tool to submit letters opposing the tariffs to your representatives. Votervoice.net/iframes/MICorg/Campaigns/125278/Respond

• Invite members of Congress to tour your business, especially during upcoming district work periods, to demonstrate the impact of tariffs firsthand.
• Monitor emails for further advocacy instructions from MIC.
• Stay connected by subscribing to industry newsletters and considering membership in trade associations for ongoing updates and unified advocacy efforts.
• Direct any additional questions to provided contact channels, such as [email protected].

 

Take Action Tariffs could have a serious impact on our industry, on businesses large and small. This is a pivotal moment for powersports. Contact your lawmakers today and take a stand against tariffs.To make it easy, we’ve created a tool that quickly matches you with your representatives and sends a pre-written message on your behalf. Just click the button below, fill in your information, and we’ll do the rest. It takes only three minutes to complete, but your contribution can have a lasting impact.

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