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Monday, December 09, 2019

Trump’s Crazy Trade War Is About To Hurt Red States


Reprinted with permission from

Harley-Davidson and Trump have been enjoying something of a bromance for the last two years. But the red state motorcycle manufacturer may soon pay a big price for Trump’s latest, irrationalpolicy plan.

And they won’t be alone.

During the 2016 campaign, candidate Trump tried to bask in an association with Harley riders.

Then just two week’s into his term, company officials showed up at the White House and parked several bikes outside for Trump to admire. Soon after, during an address to Congress, Trump complimented the company by name.

But now, thanks to Trump’s rushed decision to announce a sweeping trade war — a decision he made without first informing aides or top officials throughout the federal government —Harley-Davison could be among the first American companies targeted by U.S. trade partners as they retaliate against Trump’s radical new policy.

By announcing that the United States will impose strict tariffs on steel and aluminum imports, Trump basically dared U.S. trade partners to punch back and to make it harder for American companies to sell their products overseas.

And on Friday, officials with the European Union suggested the group’s initial “counter measures” could include imposing steep tariffs specifically on Harley-Davidson motorbikes being shipped into various countries.

Why Harley-Davidson? It may be because of its status around the world as an iconic American brand. So symbolically, if you want to poke the U.S., you poke Harley-Davidson.

That could also be why EU trade partners are also threatening to target American bourbon distilleries, which would hit red state manufacturers in Kentucky and Tennessee especially hard.

Harley-Davidson is based in Wisconsin, one of the predominantly white, Rust Belt states that went for Trump in 2016 by the narrowest of margins.

Yet even before Trump unleashed a trade war that could damage the company’s bottom line, Harley-Davidson has been struggling, in part because of Trump.

Earlier this year the company announced it will be closing its manufacturing plant in Kansas City, Missouri, resulting in roughly 800 layoffs. Specifically, the decision was due to an $8.3 million quarterly earnings drop triggered “in part because of a charge associated with President Trump’s tax cut.”

Currently, shares for the publicly company are down in value by 24 percent over the last year — despite the fact the Dow Industrial has spiked during the same time frame.

Harley-Davidson’s looming trade woes all stem from Trump’s apparently spur-of-the-moment decision to completely alter U.S. trade policy.

Incredibly, according to an NBC report, when Trump made the announcement on Thursday, “No one at the State Department, the Treasury Department or the Defense Department had been told that a new policy was about to be announced or given an opportunity to weigh in in advance.”

Additionally, “There were no prepared, approved remarks for the president to give at the planned meeting, there was no diplomatic strategy for how to alert foreign trade partners.”

That’s Trump’s chaos theory in action. The unintended consequences may be red state companies like Harley-Davidson paying a big price overseas.


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