Transcript for Whiskey, Harley prices expected jump in Europe as tariffs come into effect

Hey guys I'm Molly and Terry lighting you're watching ABC news live and only things that sound that Harley-Davidson motorcycle of course. Now president has started its trade were when he is flat tariffs on US imports of aluminum and steel that day European Union has kick that trailer into high here as slapping tariffs. On imports over here of American gets 3.2 billion dollars with American does not just any American goods but symbolic iconic American goods like. Kentucky Bergen Levi's Jeans and like Harley-Davidson. Motorcycles not a company wouldn't patches but they did give us a statement that said they support free and fair trade. Reading between alliance doesn't sound like there band and Disney tit for tat trade war. So Harley is getting it from both sides could in the US the cost of their raw materials are going up with those US import tariffs. On aluminum and steel and its US sales slipped and the company tries to this European sales the cost of this bike is that get a lot more expensive. We can act as that in Gilroy isn't the whiskey bar it's Friday afternoon in the only ones in here is his seem out he is the owner and manager and chief Jim Curtin and it. And this is not I think pretty from Chatham house. He's an economist there so we're trying to figure out what this actually means for consumers of course we're Harley-Davidson earlier today the Kentucky bird and one of the American goods that are to be hit hard today the service you Mathieu. What is actually mean and why you think. Each has the. I think any sort of retaliatory tariffs like this sort of terrorist is designed not to inflict the most economic damage but the most political damage on the people who implemented these terrorists in this case president trump. So they're targeting iconic brands that have political resonance with powerful Republicans in congress such as Kentucky senator Mitchell McConnell. Wisconsin representative Paul Ryan also the new. Potential house speaker Kevin McCarthy from northern California. Near where the advice is headquartered. We see a lot of political attempts to leverage the political process in the United States by these rather than try to seek the most macro economic damage. These tariffs aren't actually designed to bring economies downer to seriously hit consumers or producers they're trying to send a message. I think there is going to be some economic affect people in the UK will pay and Europe will pay more for these products and people in the United States will pay more for steel. Which is what caused this retaliation in the first place but in the end of the most of this is political rather than macroeconomic. That came out you currently writes gene you're thinking you're thinking actually cut you you are drinking as an American and connect you with gay and and you happens a Hartley. Davidson motorcycle I think that element and. And yet is it's a mean for me you know regal which shall pay that we souls we go for two skis and shall perfectly for upsets me is American whiskey. You know as sad as it sounds we will be a take is with assaulting his soul gearing up our sort sculpture of him whiskey and schools play next Japanese with skis. Because they'll be the best approach ones in the market and fortunately you know I don't like to sell things people there are priced on the left the money. And with this when he flips an increase in Americans can name it's gonna be. It's likable which chiefs might cost and so saying it will keep on the shelves before she they went by it with scorched now so don't doubt that money maybe certainly statements. Soaking in sizzle pop culture market American which is very good you know they also hinting that. Market American was keeping sick of that because if you raise the price of one. Governments and with so how quickly will your customers feel that I that you this this applies to imports that are leaving the US say anything RD in the country anything art and your shelves not yet know. How many matches that it take for you actually to serve in Russell the sliding scale and the rarer products we gets financial clients of Patrick Michaels be tax they'll be hit very quickly X is not that much in the country. And stuff like you mention of what about which rice united as this quality in wet emblem to a house in the country ready to that we find out trickle up into the market ready. I mean a sort predicts which stock levels in Seoul on well as the mime and that you install ritzy on everything towards him Osama. And the rarest stuff will be hit. Life in this month because they're just not as it there's not as much it would cost again I nagging they didn't release his applications. On expectations for you know I am so Klein was these comments about that hit that we hear us Harris. So what happens next in the tip for tat war so. We had put in China threatening to place 20% tariff on your cue cards. If you. Generally when economists talk about it tit for tat trade war this is exactly what they're talking about them the United States is implemented tariffs on steel aluminum the EU has retaliated the US thinks that's unfair retaliating further. Generally are cooler heads need to prevail to make sure that this doesn't become so large that. More and more goods don't become. Subject to tariffs because in the end everybody consume something and the more goods are under terrorist higher prices are going to. Get generally the WTO normally steps in to provide some sort of adjudication for disputes like this. But with president trump saying that the WTO is to get the United States in that he won't abide or even withdraw from the WTO case of an unfavorable ruling. That option doesn't seem like it's going to work this time which means that we could keep going and coming up this could become something that affects more and more and more products and more and more and more consumers will feel will feel the pinch. It is for European consumers by yearly prize by your content keeper and and buyer Harley-Davidson now a for the price goes up. We've got whiskey drink we've got to cats Friday afternoon and landed thanks so much for watching I'm Ali center in London and even watching ABC news.

This transcript has been automatically generated and may not be 100% accurate.