Economics expert: Tariffs on foreign steel could hurt Harley-Davidson 3 ways

MILWAUKEE -- Good for some, bad for others. That is how one expert describes President Trump's plan to put tariffs on foreign steel and aluminum. FOX6 News has talked about the possible impact on Wisconsin businesses like breweries. But what about Harley-Davidson?

The iconic motorcycle maker has come out against the tariffs saying it will drive up the cost of making hogs and could hurt sales outside of the U.S. The chairman of Marquette University's economics department says the tariffs could actually hurt Harley-Davidson in three ways. "Steel is back, aluminum is back," said President Donald Trump at a Pennsylvania rally over the weekend. President Trump touted his plan to place tariffs on foreign steel and aluminum. The president says it will re-energize American production in those industries.

"A strong steel and aluminum industry are vital to our national security, absolutely vital. Steel is steel. You don't have steel you don`t have a country," President Trump said. Supporters of the tariffs say it is only fair. For example, India has one on Harley-Davidson motorcycles.

Marquette University economics professor Joe Daniels

"I would say two wrongs don't make a right," said Joe Daniels, the chairman of Marquette's economics department. Daniels said the tariffs can hurt Harley-Davidson in three ways. First, if foreign steel costs more, it will increase the motorcycle maker's manufacturing costs. "That's the reason why we import a lot of steel and aluminum is that simply, we can get the product cheaper because of big capacity globally," Daniels said.

Daniels said the company could also suffer from retaliatory tariffs imposed by other countries. The European Union has specifically mentioned Harley-Davidson as a possible target.

Third, if there is a ton of foreign steel no longer going to the U.S., it'll be cheaper for others. "That can benefit Harley competitors -- let's say, for example, BMW -- they have the potential for getting steel cheaper now," Daniels said. A statement from Harley-Davidson says the following:

"Harley-Davidson’s purpose is to help our customers fulfill dreams of freedom around the world. We support free and fair trade. We believe Import tariffs on steel and aluminum will drive up costs for all products made with these raw materials, regardless of their origin. We are currently evaluating our options for managing these anticipated cost increases following last week’s announcement. Additionally, we believe a punitive, retaliatory tariff on Harley-Davidson motorcycles in other major markets would have a significant impact on our sales, our dealers, our suppliers and our customers in those markets."

We have been down this road before. In 2002, the Bush Administration placed tariffs on steel. Other countries, including the European Union, threatened tariffs on American products. Those tariffs were lifted in 2003.