31/05/2025
In today's video I stated that tariffs are a consumer tax, when talking about the $700 fee I paid for my new KTM. Technically, this isn't correct, and I apologize. A tariff is charged to the importer of a consumer good. The importer, in this case KTM, owes the tariff to the federal (US) government. The importer can eat all or part of the tariff amount, thereby reducing profit margin, or, can pass the cost of the tariff on to the consumer.
Typically, the cost is passed to consumers, which it was in this case. So, my money will flow to the importer, who then has to pay the US government. In effect, consumers pay most of the tariff, and it acts like a tax increase. This is exactly how it played out for me.
Governments use tariffs to raise revenue, protect domestic industries by making imports less competitive, encourage consumers to buy local products, or to leverage trade negotiations. Strategic, targeted tariffs have always been a part of our economy, and are used by most other countries as well. That is VERY different from broad based approach we have in place currently, which economists agree can, and is, harming consumers due to higher prices (like my KTM), creating uncertainty for corporations and investors, and slowing GDP growth.
I'm an economist by training. My post here, and my video today, is not and was not political, although many of you have chosen to make it so. I paid an extra $700 for a bike, money that goes to my federal government. Good or bad, that's up to you - I'm just sharing the facts!
It's absolutely nothing to do with California, and absolutely nothing to do with my dealership. Although many of you have wrongly stated these things.
Ok, back to riding motorcycles!
