What happened 

Shares of motorcycle icon Harley-Davidson (HOG 2.32%) fell as much as 6.1% in trading Thursday as trade tensions between the U.S. and China seemed to heat up again. The stock bounced near its daily low all day and closed down 5.8% for the day. 

So what

It's worth noting first that the stock market overall had a bad day today, and that didn't help Harley-Davidson's stock. The Dow Jones Industrial Average fell nearly 800 points just before noon, although it recovered to close at just a 0.3% loss on the day. 

Motorcycle riders on the highway.

Image source: Getty Images.

The more-direct news for Harley was the arrest of Huawei CFO Meng Wanzhou in Canada, which was reportedly directed by the U.S. The fear is that the arrest will lead to a collapse of a recent trade truce between the two countries, which have been escalating a trade war for most of President Trump's term.

Asia-Pacific, excluding Japan, accounted for 8.6% of Harley unit sales in 2017, and high tariffs could take a bite out of that. It may not sound like a big deal, but in a market where motorcycle sales overall are declining, the company needs all the bright spots it can find. 

Now what

I would attribute the drop in Harley shares today more to market volatility than to fundamental weakness long term. That isn't to say an escalating trade war wouldn't be bad for the company, but today's news isn't going to directly hurt motorcycle sales in the way direct tariffs in Europe did. It's very possible that shares recover all of their losses tomorrow and that this is a blip on the radar, which would be par for the course in today's market.