For more information on this subject, tune into GarageCast Episode 300
Tariffs and the Powersports Industry: What Dealers Need to Know
The powersports industry has always been driven by changing market conditions, consumer demand, and global economics; however, tariffs now stand as a central pillar in shaping its direction, creating cost pressures, disrupting supply chains, and forcing manufacturers and dealers alike to revisit their strategies for success.
To help unravel this complex situation, we enlisted the assistance of two of the industry's most influential voices: Christy Lacruelle, President of the Motorcycle Industry Council (MIC), and Scott Schloegel, Senior Vice President of Government Relations at MIC. Their insights provided a deeper understanding of how tariffs impact motorcycles, ATVs, and side-by-sides; most importantly, though, what dealers can do about it.
Ground Level Tariffs
Schloegel reminds dealers that tariffs aren't simply an abstract Washington issue: their effects can be felt directly at the retail level. A motorcycle that should retail for $10,000 could end up costing closer to $13,000 after steel, aluminum, and reciprocal tariffs are factored in; even small parts, such as keys priced at $27.50, have seen their prices soar due to import documentation requirements and surcharges.
As these costs ripple through the supply chain, manufacturers absorb some of the fees, but ultimately, price increases are passed on to dealers and customers alike. "Dealers may be preoccupied with selling, but if they don't understand tariffs, they could find themselves subject to push back from customers who ask questions about final price tags." Schloegel notes.
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Why Timing Matters
Lacruelle emphasizes that one of the primary challenges with tariffs is speed. Too often, changes are announced and implemented almost overnight, leaving manufacturers scrambling to analyze product composition, verify material sources or redirect supply chains before dealing with today's surcharges on their inventory priced under yesterday's rules. Lacruelle has successfully advocated for pauses and exclusions before, yet she makes one thing clear: industries require planning time. Without it, entire sectors are forced into reactive mode.
Legislative Landscape
Understanding how tariffs come to life is vitally important. Under the International Emergency Economic Powers Act (IEEPA), Presidents have the authority to quickly impose tariffs during declared emergencies without going through Congress's more cumbersome processes, meaning decisions with far-reaching industrial implications can be made and enforced almost instantly.
Schloegel, who spent years working in Washington, explains this challenge with striking clarity: when tariffs are implemented through IEEPA, businesses have fewer opportunities to request exclusions or appeal. Implementation can happen quickly and abruptly." Consequently, industry relationships with lawmakers are of crucial importance. Advocacy efforts can mitigate the impact of tariffs or alter exemption policies, provided policymakers understand the effects of tariffs on local dealers.
Ripple Effects Extending Beyond the Showroom
Tariffs have far-reaching repercussions that extend well beyond the sticker prices of motorcycles. Powersports dealerships in rural towns can often be considered major employers and civic supporters; when margins shrink, so do investments made in local communities, ranging from youth sports sponsorships to disaster relief contributions.
Tariffs impact more than dealerships: they affect local economies and community well-being. Lacruelle reminds us that dealerships aren't simply businesses: "they serve as anchors in their communities."
Unity and Data in Action
Lacruelle and Schloegel emphasize that the industry must speak with one voice, emphasizing empirical data as the cornerstone for change. Legislators need to see sales declines, service delays, and consumer cost increases quantified with real numbers.
At that point, dealers come in. Measuring the effects of tariffs on sales, parts orders, or customer sentiment provides advocacy groups like MIC with sufficient evidence to inform policy changes accordingly.
What Dealers Can Do
Tariffs may seem too large an issue for any single dealer to influence, but that's far from the truth. Here is how dealers can play their role:
Document the Effect: Gather data on how tariffs impact pricing, sales, customer behavior, and regional reps in your organization. Share this information with MIC or your regional reps.
Tell Your Story: Make the issue personal. Lawmakers respond positively when local business owners explain how tariffs harm employees, customers, and communities.
Engage Your Representatives: Contacting or meeting with your congressional representatives can be a helpful step. Urge them to support tariff exclusions or ensure changes take effect more gradually.
Stay Informed: As legislative environments rapidly change, ensure you utilize MIC communications to stay ahead of emerging regulations before they impact your bottom line.
Looking Ahead
Tariffs will remain a vital economic and political tool, from addressing international trade disputes to mitigating public health emergencies. However, with industry leaders such as Lacruelle and Schloegel advocating on a national level — backed by engaged, knowledgeable dealers —powersports has an opportunity to grow its market: unity, data, and advocacy matter. Dealers cannot afford to stay out of tariff discussions —they must actively participate if the industry is to remain healthy and competitive. As Schloegel notes, each dealer has a vital voice; when we combine ours, Washington listens.
