REPORTING & ANALYSIS | Fact-checked August 29, 2026
For Canadians who ride, sell or service Harley-Davidson motorcycles, the tariff war is more complicated than a simple “add 25 per cent to the sticker price” story. Canada did impose a 25 per cent retaliatory surtax on U.S.-origin motorcycles in March 2025, but that direct motorcycle surtax was removed on September 1, 2025. It is therefore inaccurate to claim that every new Harley-Davidson entering Canada today automatically receives that former 25 per cent charge.
That does not mean the trade conflict has stopped affecting Harley-Davidson or Canadian riders. Harley-Davidson’s own financial reports say new or increased tariffs have reduced its margins. Costs can still reach Canada indirectly through metals, imported components, manufacturing, foreign exchange, shipping, dealer inventory, financing and changes to manufacturer incentives.
What changed with Canada’s motorcycle tariff?
On March 4, 2025, Canada placed a 25 per cent surtax on $30 billion worth of U.S. goods in response to U.S. tariffs on Canadian products. The list expressly included motorcycles. However, the federal government later removed most of those counter-tariffs effective September 1, 2025. Canada kept separate countermeasures on steel, aluminum and certain automobiles, but motorcycles were no longer on the active general counter-tariff list.
This distinction matters. A Canadian customer comparing a new Harley-Davidson in 2026 should not be told that Ottawa is currently collecting the former 25 per cent motorcycle surtax. Any price pressure now is more likely to arise elsewhere in the cost chain.
How tariffs can still raise Harley-Davidson’s costs
A heavyweight touring motorcycle uses far more than a finished frame and engine assembled at one plant. It depends on steel, aluminum, castings, electronics, suspension and brake components, wiring, rubber, paint materials, batteries, accessories and global logistics. Tariffs affecting any part of that chain can increase the manufacturer’s landed cost even when the finished motorcycle itself is not subject to a Canadian surtax.
Harley-Davidson reported that its first-quarter 2026 motorcycle gross margin fell from 29.1 per cent to 25.3 per cent. The company specifically identified the cost of new or increased tariffs as one of the reasons. Harley-Davidson Motor Company’s operating income fell from US$116 million to US$19 million in the quarter, although tariffs were not the only cause; pricing, incentives, product mix and restructuring costs also mattered.
The second quarter showed why the effect is not one-directional. Harley-Davidson reported a tariff recovery that benefited gross profit, partly offsetting weaker product mix, net pricing, raw-material costs and foreign exchange. That means tariffs can hurt in one period and later be partly recovered, remitted or mitigated. It also means nobody can responsibly calculate a Canadian price increase by simply multiplying a motorcycle’s price by a tariff rate.
Five possible effects on Canadian riders
1. New motorcycle prices may become less predictable
Harley-Davidson can respond to higher costs in several ways: absorb them, negotiate with suppliers, shift sourcing, change production allocation, reduce incentives or adjust wholesale pricing. Canadian dealers then make their own decisions about discounts, freight, setup charges and how quickly older inventory must move. The result may be a higher advertised price, fewer rebates, a smaller discount—or no visible change at all.
2. Parts and accessories could feel pressure
The tariff discussion is not limited to complete motorcycles. Replacement parts, chrome accessories, luggage, exhaust components, riding gear and workshop supplies may follow different tariff classifications and supply routes. Even when a specific part is not directly tariffed, higher metals, warehousing, brokerage or transport costs can affect the final Canadian price.
3. Financing can magnify a modest price change
Many premium touring motorcycles are financed. A few thousand dollars added to the final transaction—or the loss of a manufacturer incentive—can increase the down payment, amount financed and total interest paid. Interest rates and loan length may matter as much as the tariff-related portion of the price.
4. Used Harleys may hold their value differently
If new motorcycles become more expensive or less heavily discounted, some buyers may move to the used market. That can support resale values for clean Canadian bikes. The opposite is also possible if consumer confidence weakens and discretionary spending falls. Harley-Davidson itself identifies used-motorcycle supply and pricing as a factor that can affect new-bike sales.
5. Canadian dealers may face tighter margins
A dealer cannot always pass every added cost to the buyer. Competition from other brands, used inventory and customers’ monthly-payment limits place a ceiling on pricing. Dealers may absorb part of the increase, reduce discounting, carry fewer motorcycles or focus on service, parts, apparel and events. Those choices can affect employment and local motorcycle communities even when no tariff appears as a separate line on the sales contract.
Harley-Davidson was already under pressure
Tariffs are only one part of the company’s challenge. Harley-Davidson’s full-year 2025 motorcycle shipments declined 16 per cent, motorcycle-company revenue fell 13 per cent and gross margin dropped 3.8 percentage points. The company attributed the margin decline to incremental tariffs, lower volumes and negative operating leverage. Worldwide retail sales fell 12 per cent in 2025, while North American sales fell 13 per cent.
There were signs of improvement in 2026. First-quarter North American retail sales rose 14 per cent and second-quarter North American retail sales increased 3 per cent. But Harley-Davidson’s public regional figures combine Canada and the United States, so they do not prove that Canadian sales rose by the same percentages. In fact, the company said first-quarter U.S. retail growth was 16 per cent, implying that the broader North American result should not be treated as a Canada-specific number.
Could production move outside the United States?
Harley-Davidson already operates a global manufacturing network, including U.S. facilities and a plant in Thailand. Its regulatory filings describe tariffs as a factor in manufacturing and market-supply decisions. Moving or reallocating production can reduce exposure to one tariff wall, but it is neither free nor immediate. Plants, supplier qualifications, regulatory certification, shipping and brand expectations all limit how quickly production can change.
For Canada, the country of origin matters because tariff treatment is based on customs rules, not merely the badge on the fuel tank. A motorcycle from a U.S. company is not automatically treated the same as every other motorcycle made by that company in every country.
What Canadian buyers should ask before signing
- Is this motorcycle already in Canadian dealer inventory?
- What is the country of origin shown on the documentation?
- Are freight, preparation and dealer fees included in the advertised price?
- Did a rebate or financing promotion change from the previous model year?
- What is the total cost of borrowing—not only the monthly payment?
- Are accessories included, discounted or priced separately?
- How does the deal compare with a late-model used motorcycle?
What this could mean for Canada
Canada’s direct exposure is concentrated among riders, dealerships, service departments, parts distributors, tourism events and local businesses tied to motorcycle culture. Harley-Davidson is not a Canadian manufacturer, but Canadian-owned dealerships and independent shops employ Canadians and spend money in their communities.
The broader lesson is that tariff wars rarely stop at the border or remain confined to the product named in a government announcement. Costs can travel through materials, components, currency and financing. Some are absorbed by companies, some by dealers and some by consumers. Demand can fall, which then places pressure on employment and investment. The burden is shared—but not necessarily evenly.
The bottom line
Canadian Harley-Davidson buyers are not currently facing Canada’s former blanket 25 per cent motorcycle counter-tariff. That measure ended September 1, 2025. Nevertheless, the tariff war can still influence Canadian prices and availability because Harley-Davidson is paying or managing tariff-related costs elsewhere in its supply chain.
The most defensible conclusion is not that every Harley in Canada will suddenly cost 25 per cent more. It is that tariffs add cost and uncertainty to a company already balancing affordability, lower volumes, dealer health and a complicated international production system. Whether a particular Canadian rider pays more will depend on the model, its origin, dealer inventory, incentives, exchange rates and financing at the time of purchase.
Proven sources used
- Department of Finance Canada: Canada’s response to U.S. tariffs — confirms the September 1, 2025 removal of most counter-tariffs and the remaining steel, aluminum and automobile measures.
- Department of Finance Canada: March 4, 2025 tariff package — confirms motorcycles were included in the original 25 per cent counter-tariff list.
- Harley-Davidson: First-quarter 2026 results — tariff costs, margins, shipments and regional retail figures.
- Harley-Davidson: Second-quarter 2026 results — tariff recovery, gross margin and North American sales.
- Harley-Davidson: Full-year 2025 results and 2026 outlook — shipment, revenue, margin and retail-sales trends.
- U.S. Securities and Exchange Commission: Harley-Davidson 2025 Form 10-K — manufacturing, tariff and supply-chain risk disclosures.
Corrections: Canadian Country Life welcomes corrections when official information changes. Tariff measures can be amended quickly; this article reflects information verified on August 29, 2026.
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