Trump Tariffs and Harley-Davidson
Robert A. Levine 6-27-18
Harley Davidson is the epitome of an All-American company, born in the U.S.A. Both the company and its American buyers are symbols of American love for the open road and American freedom. Now President Trump is hitting on Harley Davidson because his misguided tariffs and the European response threaten to make Harleys too expensive to buy in the E.U. Harley-Davidson wants to build a factory in the E.U. to make its motorcycles without the added tariff which would cut down or eliminate sales.
Instead of fighting with our allies over tariffs on different products, we should be negotiating with them and working with them to manage Chinese disregard of fair trade rules together. The Chinese are stealing intellectual property from the Europeans as well as from the U.S. and is dumping products below cost to control markets in all Western countries. Instead of conflict with our allies over trade policy, this would be a great opportunity to push for fair trade for all.
It seems that President Trump does not understand the intricacies of international trade and the meaning of trade deficits and is dealing from a shortened deck. He thinks that by bullying the E.U. and China, Canada and Mexico, he will be able to get what he wants. The question however, is does he know exactly what he wants. Part of the problem is the uncertainty for American businesses about what the outcome of this trade war will be. Will there be more negotiations at some point and will America and the E.U. make nice to each other. Will they be able to work together to stymie China’s unfair trade practices. Having a clear cut presidential policy on what outcome he desires would definitely help our allies and companies at home figure out what they have to do.
If Trump does not provide a roadmap for our allies and businesses, the likelihood is that we will see more American companies like Harley Davidson send some of their manufacturing abroad, just to be certain they don’t get hurt in the trade war that seems to just be getting started.
Pride and allegiance to America is important for companies that are based here, but the bottom line is still most important if workers are to keep their jobs and investors favor these companies. As a ‘businessman,’ Trump should understand this and give guidelines on what his preferred outcome would be and how he will handle different scenarios. (If he knows)