Donald Trump Rides a Harley—to Europe
“Donald Trump Rides a Harley—to Europe”: Donald Trump’s trade war was an abstraction for most Americans so far, but retaliation has now seriously begun and casualties are beginning to increase. The president’s beloved stock market took another turn on Monday with news of more investment restrictions in the United States, and the Dow Jones Industrial Average is now in 2018. But the biggest losers on Monday were American workers who make motorcycles Harley-Davidson will soon be headed overseas thanks to Trump rates.
“Donald Trump News”: Last year, #Trump praised Harley-Davidson for “building things in America,” calling the company “a true American icon, one of the big ones.” And he proclaimed last week at a rally in Duluth, Minnesota: back our work from other countries. “Awkward timing, Mr. President. On Monday, the motorcycle company announced it would move more production out of the United States.
“Donald Trump Rides a Harley—to Europe”: US motorcycle sales are declining, so Harley has kept the rubber side down, focusing on overall growth. The company considers the EU a “critical market” and last year it sold about 40,000 bicycles to European consumers. But in retaliation for “Trump’s” steel and aluminum tariffs, the European Union lifted its tax on Harleys exported by the Americans to 31 percent from 6 percent last Friday. This amounts to a tax of $ 2,200 on every motorcycle exported from the US to the EU.
“Donald Trump Rides a Harley”: In a statement from the Securities and Exchange Commission on Monday, ‘Harley’ said that “the tremendous cost increase, passed on to its resellers and retail customers, would have a prompt and enduring inconvenient effect on their business in the district, clients to Harley-Davidson items. what’s more, adversely affect the maintainability of their affiliate business. “Translation for Mr. Trump: Unlike the real estate market, cars and motorcycles are a global market.
“Trump Rides a Harley—to Europe”: #Harley chose not to raise prices, instead of charging the annual cost of $ 90 million to $ 100 million of short-term tariffs. To avoid long-term commercial penalties, Harley will reduce US operations over the next 18 months by increasing the number of bicycles abroad.
Harley has not provided details on how its American workforce will be affected. But Harley employs more than 1,000 unionized steel workers in the US – the same people the president claims to be protecting. Harley’s major manufacturing facilities are in Wisconsin and Pennsylvania, and Trump said Harley’s “big league” support helped him win decisive states in 2016.
The only answer that White House press secretary Sarah Sanders can say on Monday is that “the European Union is trying to punish American workers by engaging in unfair trade practices.” But Harley is undermined in the US. White House.
“Donald Trump Rides—to Europe”: Trump struck the first blow with its steel and aluminum tariffs, which have already raised the cost of Harley’s raw material by $ 15 million to $ 20 million this year, CFO John Olin said in an April conference call. Trump also killed the Trans-Pacific Partnership, which would cut rates for motorcycles manufactured in the United States. The US withdrawal forced Harley to pursue its “Plan B” and build a factory in Thailand to avoid Asian fares.
“We prefer not to invest in this facility, but that is what is needed to access a very important market,” CEO Matt Levatich told Bloomberg in April. Meanwhile, the company will close its 800-worker factory in Kansas City, Missouri, by 2019. Harley will expand its operations in York, Pennsylvania, but the result is still a net loss in American jobs.
“Donald Trump Rides a Harley—to Europe”: Protectionist pain is not limited to Harley. The Mid-Continent Nail of Poplar Bluff, Missouri, produces about half of the nails produced in America. But the Mexican steel mill is the main input of the company and is now subject to a 25% tariff. Mid-Continent tried to pass this cost on to consumers, but purchases plummeted and buyers canceled existing orders, opting for cheaper Chinese nails. The company has already cut 60 employees out of its 500-person workforce and will soon have to lay off 200 more. It now puts its hopes in a Trade-Related Fee Exemption, which is dealing with a portfolio of 21,000 similar petitions.
The list of job-seekers will continue to grow. A June report from economic consulting firm Trade Partnerships Worldwide estimates a net loss of 400,445 jobs over the next three years because of steel and aluminum tariffs, quotas and retaliation. There are 16 lost jobs for each steel or aluminum job.
“Trump Rides a Harley—to Europe”: The damage is likely to have political consequences, as retaliation rates target industries in oscillating states. Wisconsin produces more than 90% of America’s ginseng, and 95% of this comes from Marathon County. The county went to Mr. Trump in 2016, but is now struggling with the consequences of China’s new 15% retaliatory tariff. Trump will also have some explanations to make to Wisconsin cranberry growers, Florida orange juice growers and Iowa soy and corn growers.