Just 12 days into his presidency, Donald Trump hosted a meeting with officials from Harley-Davidson at the White House, where the Republican was eager to take credit for the company’s recent successes. He argued, “There’s a lot of spirit right now in the country that you weren’t having so much in the last number of months that you have right now.”
That “spirit” is apparently starting to change. The iconic American motorcycle company closed a domestic factory earlier this year, and Harley-Davidson’s CEO said the Trans-Pacific Partnership trade deal “would have helped us a lot” – but didn’t when Trump killed the agreement.
This morning, as the Associated Press reported, the story took another turn.
Harley-Davidson, up against spiraling costs from tariffs, will begin shifting the production of motorcycles headed for Europe from the U.S. to factories overseas.
The European Union on Friday began rolling out tariffs on American imports like bourbon, peanut butter and orange juice. The EU tariffs on $3.4 billion worth of U.S. products are retaliation for duties the Trump administration is imposing on European steel and aluminum.
The company was explicit that the production shift is intended to “alleviate the EU tariff burden,” which was recently added as a retaliatory measure in response to Trump’s tariffs on European steel and aluminum.
Of course, Harley-Davidson is just part of a larger puzzle. The New York Times reported the other day on the effects of Trump’s so-called “trade war,” which are “beginning to ripple” through the economy, disrupting domestic supply chains.
The article added, “The cascade of tit-for-tat tariffs has spooked corporate executives, potentially slowing investment, and the Federal Reserve suggested this week that it might have to rethink its economic forecasts if the trade wars continue.”
CNN had a related report on the same day, highlighting the “demoralizing” effect Trump’s trade policies have had on farmers in southern Minnesota. The report quoted Michael Petefish, a fifth-generation farmer in the area and a Trump voter, who said, “This isn’t just numbers on a sheet or percentage of trade or dollar value…. This is multi-generational American families, your base, that you are now squarely putting into financial peril.”
This is a very small sampling representing a broader phenomenon. Republicans on the Senate Finance Committee last week gave Commerce Secretary Wilbur Ross an earful, pointing to the adverse effects Trump’s agenda is having on farmers, auto producers, ketchup producers, and soft-drink distributors, among others. Among those who’ve been the most critical are traditional White House allies, including Sen. Joni Ernst (R-Iowa).
Remember, as far as the president is concerned, trade wars are “good and easy to win.”
Trump’s response to the developments, to the extent that he has one, is that those who are currently struggling as a result of his agenda will probably benefit eventually. We’re all just supposed to trust that he knows what he’s doing – all evidence to the contrary notwithstanding.
As we discussed last week, the president himself has conceded his plan may cause “pain” for some Americans, but he believes they’re willing to take one for the team. “I tell you, our farmers are great patriots. These are great patriots,” Trump said in April. “They understand that they’re doing this for the country.”
In context, “this” appeared to mean “putting their business and livelihood” in jeopardy, confident that the president’s plan will eventually pay off. The reality, however, is that it probably won’t.