Motorcycles Caught in the Crossfire of U.S.-Canada Tariffs
By now, American consumers will know the basics of trade disputes involving tariffs. Here’s a quick refresher if you’ve managed to avoid international news for nearly a decade: a tariff is a tax imposed by a government on an imported good, paid directly by the importer.
Since the Second World War, tariffs have most often been narrow, rule-bound remedies, sheltering a specific domestic industry after an agency found it was being economically harmed. These days, they’re being used a bit differently. How this affects a marketplace varies, though those higher import costs are typically passed to the consumer.
Motorcycles hold an unusual place in trade wars, having been both the cause of at least one and an unwitting conscript in a few others. As the dispute between the United States and Canada escalates, two-wheeled markets are again being pulled to the front lines, this time to a point that includes outright import bans.
Washington opened a new front against Canadian goods in August. Ottawa answered by targeting American products including any motorcycle with a displacement larger than 800cc. Now a set of U.S. proclamations signed earlier this week will bar certain Canadian-built motorcycles from entering the United States beginning Sept. 29, 2026.
How Motorcycles Became Tariff Targets
It’s a playbook from the past, though the legal machinery and how it is used today are much different. In 1983, acting on an International Trade Commission finding that imports threatened serious injury, President Reagan imposed a 45-point surcharge on imported motorcycles above 700cc to shield a then-struggling Harley-Davidson from an influx of strong Japanese competition. It was a classic case of protectionist policy.
The language here is dense, so it is worth unpacking. In the context of tariffs, an “injury” is a formal determination that an imported product is seriously harming a domestic industry. Here’s how it works: a company petitions the commission, the agency tests the claim through hearings, and any relief that follows runs on a fixed-term schedule. Harley’s surcharge declined annually and was set to run through April 1988, though Reagan ended it early, in October 1987, after Harley itself petitioned for termination. Arguably, the program extended the financial runway H-D needed to survive long enough to launch the Evolution V-twin in 1984, rebuild its manufacturing and execute successful marketing campaigns.
That was one of the last times motorcycles were the point. In June 2018, the European Union answered U.S. steel and aluminum tariffs by targeting American-made motorcycles above 500cc, pushing Harley’s import rate from 6% to 31%. The company disclosed in a securities filing that this added roughly $2,200 (USD) per bike. In response, H-D moved European production offshore to avoid raising prices. Motorcycles were one line among many in a dispute about metals.
In 2019, U.S. officials proposed a 100% levy on European motorcycles ranging from 500cc to 700cc as a response to the Airbus-Boeing dispute. Ultimately, motorcycles and motorcycle components were dropped from the list before it took effect. Again, our two-wheeled machines were merely pawns in a larger game.
During this period, the trade climate was in a state of flux. The North American Free Trade Agreement, negotiated under President George H.W. Bush and in force since January 1994, governed North American trade for more than two decades when Donald Trump campaigned against it in 2016, calling it “the worst trade deal maybe ever signed anywhere.” His administration renegotiated the pact into the U.S.-Mexico-Canada Agreement (USMCA), which was signed in November 2018 and took effect July 1, 2020.
At the time, Trump described the administration’s deal as “the best agreement we’ve ever made.” He has since soured on it, saying in 2025 that Canada and Mexico “took advantage of the United States on manufacturing.” USMCA’s first mandatory joint review took place July 1, 2026. Canada and Mexico both confirmed they wanted to extend the agreement. The United States did not, with U.S. Trade Representative Jamieson Greer stating it “did not agree to renew the USMCA in its current form.” Greer’s statement left the door open, saying the United States would keep engaging with both countries on what it called the agreement’s shortcomings. The pact remains fully in force and preferential treatment is unchanged. The pact remains fully in force and preferential treatment is unchanged. But non-renewal triggers annual reviews and starts a clock toward expiry roughly a decade out, on July 1, 2036, unless the three governments later agree to extend. That uncertainty is the climate every measure described below now operates in.
In February, the U.S. Supreme Court held, in a 6-3 decision in Learning Resources Inc. v. Trump, that the International Emergency Economic Powers Act does not authorize tariffs at all, ending the large-scale program the Trump administration had built on that statute since the start of its second term.
The administration pivoted to an older law carrying far broader authority. Section 338 of the Tariff Act of 1930 does not ask whether an American industry has been injured. It asks whether another government is discriminating against American commerce, and it leaves that finding to the president. It sets no expiration date. Whether the law also required the commission to investigate first is now being contested in court.
What that difference means is contested. The Trump administration’s 2026 Trade Policy Agenda frames the program as reshoring strategic industries and treating economic security as national security. Critics argue that without an injury test, the measures behave as leverage rather than economic shelter. The decision to tax Canadian motorcycles cuts both ways. No American manufacturer asked for it, and there is no competing machine to protect this time around. The administration’s answer is that the aim was never relief for one industry but a broad rebalancing.
Having sought a 16-year extension in July and been refused, Prime Minister Mark Carney has framed the dispute as justification to reduce Canada’s reliance on the United States. Speaking to The Associated Press after the counter-tariffs took effect, he said the cumulative U.S. demands had revealed that Washington wanted Canada more reliant on it, not less, and that in too many areas the Americans sought “dependency, not a true economic partnership.” For context, roughly three-quarters of Canadian exports still go to the United States. In remarks delivered Aug. 22, Carney said non-U.S. exports were up sharply and on track to double over the next decade. Should that reshuffling take hold, it could reorganize trading relationships well beyond North America.
Why Washington Taxed Canadian Motorcycles
In July, Trump signed three proclamations under Section 338 covering alcohol, dairy and motor vehicles. The statute is available only against a country found to discriminate against U.S. commerce, and the proclamations set out that case. Their findings cite Canada’s 25% surtax on American-built vehicles imposed in April 2025, dairy quotas the administration argues favor European exporters, and provincial decisions to remove American alcohol from shelves, which the administration deems discriminatory. They also cite a decline of roughly 22% in Canadian purchases of U.S.-made vehicles. The Canadian government disputes the framing, calling each of those measures a response to earlier American tariffs.
Suspending negotiations on Aug. 21, Carney called the late changes to U.S. terms unfair and uneconomic, closing with a line that has framed Ottawa’s posture since: “We will not allow any nation to determine our future.” Greer said Canada sought further concessions after a deal had been outlined.
Canada’s 800cc Line Hits Nearly All U.S. Brands
Both countries have taxed the other’s motorcycles, but not at the same time or in the same way. Canada went first: in March 2025, Ottawa put a 25% surtax (that’s the Canadian wording) on $30 billion (CAD) of American goods, with motorcycles listed alongside orange juice, appliances and footwear. Nothing on that list singled motorcycles out, and it did not last. Ottawa dropped most of it in September 2025.
The 800cc line came from Washington in the July 2026 proclamation taxing Canadian motorcycles above that displacement, effective in August. Ottawa answered on Sept. 8 with a 50% rate on American motorcycles above the same 800cc. Canada’s first motorcycle tariff was broad. Its second one copies the American measure exactly.
According to the Department of Finance Canada, those counter-tariffs cover $27.6 billion (CAD) of American goods, about $20 billion (USD), at rates of 15%, 25% and 50%. Internal-combustion motorcycles above 800cc draw the top 50% rate.
Because of the 800cc line in the sand, brands such as Harley-Davidson and Indian Motorcycle will see their North American product lines impacted. Neither manufacturer sells a U.S.-built model below 800cc. Look further, and the tariffs sweep across virtually every domestic motorcycle brand, down to boutique marques like Arch Motorcycle and Combat Motors.
As Harley-Davidson accounts for the lion’s share of U.S. motorcycle production, the measure lands hardest there. The company’s annual report for fiscal 2025, filed with the Securities and Exchange Commission (SEC), records 6,434 retail units sold in Canada. Measured against 132,535 sold worldwide, Canada represents 4.9% of global volume.
The Department of Finance Canada has stated its rationale behind the moves is to strengthen Canadian producers. However, Industry Minister Mélanie Joly said in a CBC interview on Aug. 25 that Ottawa was “putting pressure clearly on different states and different people,” showing a sharper intent in tariff targeting. For context, Harley’s assembly plant is located in York, Pennsylvania. More importantly, that plant sits in Pennsylvania’s 10th Congressional District, one of the closest electoral races in the country in 2024 and among those expected to be competitive again in November’s midterm elections.
What the Import Ban Means for Can-Am
Section 338 permits what tariffs cannot. Where the president finds discrimination maintained or increased, he may exclude goods from importation entirely.
Trump signed five proclamations on the night of Sept. 8. Three imposed import bans effective Sept. 29 covering Canadian alcohol, dairy and motor-vehicle goods, including larger motorcycles and mopeds. Two proclamations revise the July lists from Sept. 15.
BRP, the Quebec manufacturer behind Can-Am, confirmed this week that several Canadian-built models will be excluded from the U.S. market. What is covered in the bans depends on the country of manufacture. Simply put, not everything in BRP’s portfolio is Canadian built, meaning its exposure isn’t as great compared to American motorcycle makers. However, the United States is by far its primary market and that could prove to be detrimental in the long term.
For example, the Can-Am Origin and Pulse electric motorcycles will not be affected, as BRP builds them at its plant in Querétaro, Mexico. In addition, many readers may not realize that Can-Am’s three-wheelers fall under the same tariff classification as two-wheeled motorcycles. BRP builds the 1,330cc Rotax engine-powered Spyder and Canyon ranges in Valcourt, Quebec, putting them squarely inside the ban. The entry-level Ryker is assembled in Juárez, Mexico, and its 600cc version sits below the 800cc threshold entirely.
How much that matters can be illustrated by examining BRP’s financial filings. In its annual report for the fiscal year ended Jan. 31, 2025, the company reported revenues of $4.52 billion (CAD) from the United States against $1.10 billion (CAD) from Canada, out of $7.83 billion (CAD) overall. The U.S. accounted for roughly 58% of revenue, while Canada accounted for about 14%. In other words, BRP stands to lose a crucial income stream, should these bans come to fruition.
A transition rule shapes the two and a half weeks. Goods imported but not entered for consumption before Sept. 29 remain subject to the 50% duty. Anything after that cannot enter at all, turning customs timing into the difference between an expensive motorcycle and no motorcycle. The Trump administration’s tariff execution strategy has proven fluid, meaning what’s described here could change rapidly after this article’s publication on Sept. 11, 2026.
Forty-three years ago, motorcycle tariffs were credited with helping protect an American manufacturer. This round, no one can definitively say who the policy is meant to help. Trade wars are clearer about who pays: consumers.
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