by Donna Martinez
Former Senior Writer and Editor, John Locke Foundation
It’s bad news for Harley-Davidson employees in this country, and the news comes from the Associated Press (AP).
Production of Harley-Davidson motorcycles sold in Europe will move from U.S. factories to facilities overseas, the Milwaukee-based company announced Monday, a consequence of the retaliatory tariffs the EU is imposing on American exports in an escalating trade war with the Trump administration.
President Donald Trump has used the iconic American motorcycle maker as an example of a U.S. business harmed by trade barriers in other countries, but Harley had warned that tariffs could negatively impact its sales.
I understand the decision. It makes business sense, but it didn’t have to happen. AP says the move will take about 18 months to complete. Let’s hope the president changes his view on tariffs before the iconic company completes the production shift. So why is the president imposing tariffs? Mr. Trump says the U.S. must fight back against tariffs previously imposed by other countries. He says we’ve been taken advantage of for years and that it will all work out in the end. I don’t question his intent or his confidence and record as a negotiator. I question the policy itself. Economists know that tariffs create more losers than winners, and they know that free trade is the best course.
In the end, to promote “fair trade” our government should pursue unilateral free trade. It should get rid of all artificial barriers to consumer sovereignty by abolishing all import quotas, tariffs, and export subsidies. Our government should not use the fact that other countries treat their consumers and industries unfairly as a reason to do the same thing to ours.
Will there be more Harley-Davison-like announcements to come? Let’s hope not. Let’s hope the president talks more with his business friends and rethinks his misguided pro-tariff policy. If he doesn’t, we risk wiping out the positive economic gains derived from President Trump’s correct moves on tax and regulatory reform. That would be a shame for every American.