Harley-Davidson is once again caught in an international trade dispute, with a new 50% Canadian tariff threatening to raise prices and hurt sales of the iconic American motorcycles.
The latest conflict follows several rounds of tariffs.
In 2025, after the United States imposed a 25% tariff on Canadian imports, Canada retaliated with a 25% duty on Harley-Davidson motorcycles and other U.S. products. That tariff remained in effect for about six months and cost Harley roughly $8 million.
Tensions escalated again this summer. The Trump administration imposed 50% tariffs on $27.6 billion in Canadian goods, with the duties taking effect Aug. 22. The measures included large Canadian motorcycles.
Canada responded Sept. 8 with tariffs covering an equivalent $27.6 billion in U.S. goods. Among them is a 50% tariff on U.S.-made motorcycles with engines larger than 800cc, including many Harley-Davidson models.
The United States escalated the dispute further Sept. 8 by announcing that imports of certain Canadian products, including large motorcycles, will be banned beginning Sept. 29. Until then, affected Canadian motorcycles remain subject to the 50% U.S. duty.
Harley has frequently been caught in tariff disputes. The European Union imposed a 25% retaliatory tariff on the company’s motorcycles in 2018. Last year, the EU threatened a new 50% tariff, although that measure never took effect.
Harley has sometimes absorbed tariff costs rather than passing them on to customers, costing the company more than $170 million over the past eight years.
Canada represents about 4% of Harley’s $4.5 billion in annual revenue, but dealers worry prolonged tariffs could produce significantly higher prices. Most 2026 inventory arrived before the latest Canadian tariff took effect, meaning the impact could become more apparent with future shipments.
Harley could eventually shift production of motorcycles destined for Canada to its Thailand factory, since Canada’s new tariff applies to motorcycles originating in the United States.
Source: WSJ