We all knew it was coming. We all knew that the threats were real. I don't think any of the pundits who spoke about President Trump's tariffs believed it would happen on Day 1, however. But he literally said it, so maybe everyone should start believing what comes out of folks' mouths instead of pretending that it's all bluster.
But that's the mainstream media for you.
And though the tariffs weren't part of his flurry of executive orders, to which they were supposed to be, speaking with reporters inside the Oval Office just after his inauguration, Trump was asked about his proposed tariffs and told reporters that they'd be likely installed by February 1st. That means a whole lot of powersport machines, gear, and more are about to become that much more expensive. Something the whole industry absolutely does not need given how sales have declined in recent months.
According to Bloomberg, Trump told reporters, "We’re thinking in terms of 25% on Mexico and Canada, because they’re allowing vast numbers of people [across the border]," adding, "I think we’ll do it Feb. 1st." As mentioned above, that's not the Day 1 executive order he promised, but it's more than likely to come as Trump not only blamed illegal immigration, but also drug shipments of fentanyl, cocaine, and more for these tariffs.
What all this means is that products that come into the country through Canada or Mexico, which today is not just machines like those from Bombardier and CFMoto, but also the parts that make up most of all things even assembled in the US, would see massive price hikes to the tune of 25%. And, as I've illustrated in a prior post on these proposed tariffs, the cost of them is put onto the consumer and not at all collected by the country those tariffs are imposed by.
The customer, in fact, loses. Guess what that does to inflation?
As with anything from this administration, we'll have to wait and see whether or not this is more bluster than concrete policy, but given during his last term in office he applied tariffs to countries we count as friends—the UK, for instance—and how that backfired on domestic production and companies ala Harley-Davidson—I'm sure this will go super smoothly.
Either way, the industry is about to get hit and hit hard. So prepare yourself.
