Trump & Harleys: It may be more bark than bite

Bhopinder Singh

For a motorcycle brand that accounts for less than one per cent of all motorcycles in the world, Harley Davidson commands a disproportionately large mindshare that is almost cult-like and mythical in its classic “stars and stripes” appeal. From Peter Fonda on a “Panhead Chopper” in Easy Rider and Lee Marvin on a “Hydra Glide” in The Wild One to Arnold Schwarzenegger on a “Fat Boy” in Terminator — the stereotype of a macho, devil-may-care attitude with the wind blowing through the hair has been a carefully cultivated and stereotypical imagery. The iconic guzzler is rooted in the inevitable “motorcycle moment” that afflicts all and subconsciously personifies the “American Dream”, with its politically compatible campaign line — “All for freedom, freedom for all”!
Along with other “All-American” brands like Levi’s and Jack Daniels, Harley Davidson is a perfect metaphor for US President Donald Trump’s revivalist pitch for “Made in USA” globally. Mr Trump, who fancies himself as the saviour and the perfect deal-broker for all of America’s economic ailments and future deals, the backdrop setting of the trade wars with the rest of the world (including India) has witnessed the quintessential Trump-style inelegance of name-calling, mocking and bluster.
India felt the sleight of Mr Trump’s recent rant when he tweeted: “When they (Harley Davidson) send a motorcycle to India, as an example, they have to pay 100 per cent tax — 100 per cent. Now, the Prime Minister, who I think is a fantastic man, called me the other day and said we are lowering it to 50 per cent. I said okay, but so far we’re getting nothing. So we get nothing. He gets 50 (per cent) and they think we’re doing — like they’re doing us a favour. That’s not a favour.”
Even the largest economic trade bloc for US trade and possibly its closest strategic ally, the European Union, was not spared the vitriol from Mr Trump as he stated that the EU was taking the US “for fools” with its tariff arrangements.
Analogically, like India on the tariff row, Mr Trump similarly thundered: “If the EU wants to further increase their already massive tariffs and barriers on US companies doing business there, we will simply apply a tax on their cars, which freely pour into the US,” adding: “They make it impossible for our cars (and more) to sell there. Big trade imbalance!”
The retaliatory threat and no-holds-barred language was similarly deployed for Canada and Mexico. Mr Trump’s penchant and frenzy for triggering trade wars has led to mega-plans for imposing punitive tariffs on imported steel and aluminum, a move that could hurt Germany, Canada and Britain — and European Commission president Jean-Claude Juncker reciprocated the sentiment by suggesting tariffs on Levi’s, Jack Daniels and Harley Davidsons to put the message across. The gloves are off, and Mr Trump truly believes that trade wars “are good and easy to win”. This current round of the unprovoked trade slugfest, ironically, benefits Mr Trump’s bête noire China, as it remains oblivious and protected from the self-destruct bravado unleashed by him.
The temptation to play to the gallery of his core constituents and pursue a uber-nationalist agenda on trade militates against the supposed “business sense” that ought to accompany the billionaire businessman President. With the auto industry already reeling under cost pressure, any further increase in steel and aluminium prices would worsen the bottomline of the struggling US manufacturers. The flippant attitude of the US administration was showcased by the casual comment from the White House trade adviser, Peter Navarro, who brazenly said: “I think the American people are willing to pay a cent-and-a-half more for a six-pack of beer to have an aluminum and steel industry.”
The truth is usually a silent casualty in the din and emotions accompanying trade wars — such as Mr Trump’s false figures on India’s exporting to the US “thousands and thousands of motorcycles”.
On the contrary, US President Ronald Reagan had placed import tariffs on Japanese motorcycle manufacturers to protect the fledgling fortunes of Harvey Davidson from competition on American shores in the 1980s. If anything, the current Trump belligerence, apparently without the active petitioning of the US corporate honchos, can do more harm than good by dragging well-known brand names into the trade wars — first, these heritage brands would face the first wave of reciprocal tariff-treatment from irate nations; second, with the input costs of metals expected to rise, the cost structure for producing in the US would be adversely impacted; and last, these specific brands could face the angst and ire of citizens worldwide due to getting appropriated and dovetailed into the imagery of Trumpism.
As it is, Harley Davidson’s worldwide retail sales were down by 6.7 per cent in 2017, compared to 2016 — and the Harley Davidson has already forewarned of a “significant impact” owing to any potential backlash and retaliatory tariffs brewing in the trade wars.
Following a series of high-profile resignations in the US administration (43 per cent according to a Brookings Institution study), President Trump’s top economic adviser Gary D. Cohn (former CEO of Goldman Sachs) became yet another casualty.
As a free-trade proponent, Gary D. Cohn was known as the rare “grown-up” voice-of-reason in the Trump administration, and was perennially at odds with the protectionist-nationalist majority.
Already the dark clouds of the forthcoming trade wars have driven up uncertainty levels, drastically. But there’s still a perverse hope that like everything else in Donald Trump’s style of theatrics and grandstanding, the trade wars are yet another saga of “more bark than bite”.
For a man who authored The Art of the Deal, Donald Trump has been woefully at sea in negotiating any new deal in the Middle East, Beijing, Pyongyang, or in the
till-recently calm waters of global trade and commerce. That the decidedly non-tea-drinking bikers of “Bikers for Trump” club may be a loyal psychographic constituency for the policies, politics and preferences of the US President — making credible and sane ground forhis “Made in USA” pitch, is another story.