“Thank you, Harley-Davidson, for building things in America,” he said. “And I think you’re going to even expand — I know your business is now doing very well and 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.”
This week, Harley-Davidson became among the highest-profile casualties of Trump’s escalating trade wars.
Trump’s steel and aluminum tariffs had already raised the company’s input costs, because those metals are among the primary raw materials it purchases. Worse, the European Union last week “punched back” against those metal tariffs with retaliatory countertariffs of its own, including an additional 25 percent tax on Harley-Davidson motorcycles shipped from the United States.
On Monday, the company announced that it had no choice but to shift more of its production out of the United States.
Harley-Davidson, whose U.S. factories are in Wisconsin, Missouri and Pennsylvania, is hardly the only firm buckling under the weight of Trump’s brilliant trade dealmaking. Don’t take it from out-of-touch East Coast elites like me; check out all the coverage from local papers and other news organizations around the heartland, documenting the damage.
In Missouri, the nation’s last remaining major nail producer has lost half its business in the past two weeks, laid off dozens of workers and may be out of business around Labor Day. All thanks to Trump’s steel tariffs, which have sharply raised its input costs.
In Florida, orange growers fear a drop-off in demand due to retaliatory tariffs on OJ shipped to China and the European Union.
In Iowa, soybean, corn and pork producers fret about the hundreds of millions of dollars in sales they stand to lose from retaliatory duties on their exports to China, Mexico and the E.U.
Hoosiers worry about the fate of those same sectors, plus the chemical, transportation equipment and machinery industries that are being targeted for Chinese tariffs. And Indiana automotive-part and orthopedic-joint manufacturers will now face higher input costs thanks to Trump’s steel tariffs.
In Kentucky, bourbon distillers are losing business with distributors, who are frightened off by retaliatory tariffs across many of our trading partners.
It is no coincidence that so many Trump-voting areas will suffer. That’s because of two unfortunate developments.
First is our businessman in chief’s baffling lack of sophistication about supply chains. He still does not seem to understand that placing tariffs on intermediate goods such as steel and aluminum will hurt the downstream manufacturers that purchase those materials and that employ an order of magnitude more Trump Country workers than the U.S. steel and aluminum industries do.
Second is the much more strategic retaliation by our furious trading partners, which are deliberately targeting industries located in politically sensitive areas.
Trump’s approval ratings among Republicans remain strong. But as these tariffs and countertariffs steamroll across Trump Country, supporters may eventually get tired of all this “winning.”
The question is: When will Congress?
It is Congress, after all, that the Constitution actually empowers to “regulate Commerce with foreign Nations.” Yet over the past eight decades, the legislative branch has delegated more and more of its trade-regulating authority to the executive branch.
This turn of events, which began just a few years after Congress had sparked a worldwide trade war with its disastrous Smoot-Hawley Tariff Act, at first seemed like a good idea. It looked like the best way to streamline and depoliticize trade negotiations in service of a more liberalized international market — which Congress knew benefitted the increasingly hegemonic United States.
The problem, of course, is that periodically presidents have abused this power. And none have done so more than Trump, who ludicrously argues that tariffs on Canadian steel and German cars are necessary on national security grounds.
Congress certainly has the ability to claw back some of the trade powers it gave away to the White House. It has, in fact, on occasion. But with rare exceptions, Republican legislators are too fearful of an angry Trump tweet today to prevent the wholly foreseeable economic misfortunes that will befall their own constituents tomorrow.