New tariffs that could take effect would be “catastrophic” according to the CEO and Chairman of Polaris, Scott Wine.
Speaking with CNBC, Wine says that the 25 percent increase would be “downright catastrophic in terms of impact on the company and employees,” he said. This tariff will come into effect on Friday if the White House and Chinese officials can’t come to an agreement on a new trade deal.
Polaris is pursuing an exemption from the U.S. government on China tariffs and Wine is hopeful this will happen. Polaris is already factoring in roughly $90 million in tariff costs this year, and if these new tariffs come to light, the brand could take a hit as big as $195 to $200 million.
Polaris imports from Chinese suppliers, and getting new options up and running outside the country could take up to a year.
Wine points specifically that Can-Am recently finished a new production facility in Mexico, and thanks to that, the brand is not being hit with the same tariffs as his company. “What’s most ironic is I invested $150 million to build new plant in Huntsville — at the same time our competitor built one in Mexico,” he said. “They don’t pay the tariffs, and we do.”
Polaris has already been been hit with tariffs from China, and retaliatory tariffs from Europe on its shipments of Indian motorcycles to the old continent.
“Ultimately if this was not resolved, we would have no choice but to move production to Mexico,” Wine said. “This would essentially be forcing me to push jobs outside the U.S.”