Posted on 05/08/2016 8:34:01 AM PDT by detective
In an unusually strong protectionist action, President Reagan today ordered a tenfold increase in tariffs for imported heavyweight motorycles.
The impact of Mr. Reagan's action, which followed the unanimous recommendation of his trade advisers, is effectively limited to Japanese manufacturers, which dominate every sector of the American motorycycle market.
The action was exceptional for protecting a single American company, the Harley-Davidson Motor Company of Milwaukee, the sole surviving American maker of motorcycles.
(Excerpt) Read more at nytimes.com ...
The so called "principled conservatives" who oppose Trump brag about how they are the only true followers of Ronald Reagan.
They say Trumps threat to impose punitive tariffs when necessary to protect American jobs violates Reagan's principles of free trade.
They could not be more wrong. In 1983, Reagan imposed a 45% tariff on heavy motorcycles to protect Harley Davidson.
The wimps who oppose Trump probably trembled in fear of retaliation from the Japanese.
Impossible - They keep telling me this wont work
Consider that the (Reagan) administration has done the following:
— Forced Japan to accept restraints on auto exports. The agreement set total Japanese auto exports at 1.68 million vehicles in 1981-82, 8 percent below 1980 exports. Two years later the level was permitted to rise to 1.85 million.(33) Clifford Winston of the Brookings Institution found that the import limits have actually cost jobs in the U.S. auto industry by making it possible for the sheltered American automakers to raise prices and limit production. In 1984, Winston writes in Blind Intersection? Policy and the Automobile Industry, 32,000 jobs were lost, U.S. production fell by 300,000 units, and profits for U.S. firms increased $8.9 billion. The quotas have also made the Japanese firms potentially more formidable rivals because they have begun building assembly plants in the United States.(34) They also shifted production to larger cars, introducing to American firms competition they did not have before the quotas were created. In 1984, it was estimated that higher prices for domestic and imported cars cost consumers $2.2 billion a year.(35) At the height of the dollar’s exchange rate with the yen in 1984-85, the quotas were costing American consumers the equivalent of $11 billion a year.(36)
— Tightened up considerably the quotas on imported sugar. Imports fell from an annual average of 4.85 million tons in 1979-81 to an annual average of 2.86 million tons in 1982-86. Not only did this continued practice force Americans to spend more than other consumers for sugar, but it created hardships for Latin American countries and the Philippines, which depend on sugar exports for economic development. The quota program undermined President Reagan’s Caribbean Basin Initiative and intensified the international debt crisis.(37)
— Negotiated to increase restrictiveness of the Multifiber Arrangement and extended restrictions to previously unrestricted textiles. The administration unilaterally changed the rule of origin in order to restrict textile and apparel imports further and imposed a special ceiling on textiles from the People’s Republic of China.(38) Finally, it pressured Hong Kong, Taiwan, and South Korea, the largest exporters of textiles and apparel to the United States, into highly restrictive bilateral agreements. All told, textile and apparel restrictions cost Americans more than $20 billion a year.(39) The Reagan administration has stated several times that textile and apparel imports should grow no faster than the domestic market.(40)
— Required 18 countries—including Brazil, Spain, South Korea, Japan, Mexico, South Africa, Finland, and Australia, as well as the European Community—to accept “voluntary restraint agreements” to reduce steel imports, guaranteeing domestic producers a share of the American market. When 3 countries not included in the 18—Canada, Sweden, and Taiwan— increased steel exports to the United States, the administration demanded talks to check the increase. The administration also imposed tariffs and quotas on specialty steel. These policies, with their resulting shortages, have severely squeezed American steel-using firms, making them less competitive in world markets and eliminating more than 52,000 jobs.(41)
— Imposed a five-year duty, beginning at 45 percent, on Japanese motorcycles for the benefit of Harley Davidson, which admitted that superior Japanese management was the cause of its problems.(42)
— Raised tariffs on Canadian lumber and cedar shingles.
— Forced the Japanese into an agreement to control the price of computer memory-chip exports and increase Japanese purchases of American-made chips. When the agreement was allegedly broken, the administration imposed a 100 percent tariff on $300 million worth of electronics goods. This episode teaches a classic lesson in how protectionism comes back to haunt a country’s producers. The quotas established as a result of the agreement have created a severe shortage of memory chips and higher prices for American computer makers, putting them at a disadvantage with foreign competitors. Only two American firms are still making these chips, accounting for a small percentage of the world market.(43)
— Removed Third World countries from the duty-free import program for developing nations on several occasions.
— Pressed Japan to force its automakers to buy more American-made parts.(44)
— Demanded that Taiwan, West Germany, Japan, and Switzerland restrain their exports of machine tools, with some market shares rolled back to 1981 levels. Other countries were warned not to increase their shares of the U.S. market.
— Accused the Japanese of dumping roller bearings, because the price did not rise to cover a fall in the value of the yen. The U.S. Customs Service was ordered to collect duties equal to the so-called dumping margins.(45)
— Accused the Japanese of dumping forklift trucks and color picture tubes.(46)
— Failed to ask Congress to end the ban on the export of Alaskan oil and of timber cut from federal lands, a measure that could substantially increase U.S. exports to Japan.
— Redefined “dumping” in order “to make it easier to bring charges of unfair trade practices against certain competitors.”(47)
— Beefed up the Export-Import Bank, an institution dedicated to promoting the exports of a handful of large companies at the expense of everyone else.(48)
— Extended quotas on imported clothespins.
http://www.cato.org/pubs/pas/pa107.html
I think our boss said it best
Jim Robinson wrote:
http://www.freerepublic.com/focus/f-news/3421722/posts
It was against Reagans’ ideals but the Japanese were playing unfair. Just think what Harley Davidson means to America. The Japanese miscalculated on this one. Thank Pat Buchanan.
“In 1983, Reagan imposed a 45% tariff on heavy motorcycles to protect Harley Davidson. “
I believe that trade agreements signed since 1983 make it impossible to impose tariffs to protect an industry now. If we impose a tariff we get taken to a foreign court where, to my knowledge, we have never won a case. If found not in compliance with the treaties, like GATT and NAFTA our trading partners get to retaliate with their tariffs. Those tariffs will target and destroy whole industries until we relent. We have ceded our sovereignty to foreign courts. This is why I am against the TPP as nobody has the slightest idea what Obama has put into it. He could, for example, allow our trading partners to put tariffs on us if we don’t curtail or eliminate private gun sales. We simply don’t know as the documents are secret. One source has reported that only 25% of the pages relate directly to trade. The rest is on immigration, social and ecological matters.
I am a Trump supporter but does anyone get that his plan to put up tariffs on imports hurts US THE AMERICAN CONSUMER???
ABOLISH THE UNCONSTITUTIONAL FEDERAL MINIMUM WAGE.
CUT TAXES.
ABOLISH THE UNCONSTITUTIONAL FEDERAL ADMINISTRATIVE STATE AND THEIR THOUSANDS OF DEAD-END, USELESS, AND COSTLY REGULATIONS.
ABOLISH FEDERAL PROTECTION OF UNIONS.
Do that and businesses won’t leave and many will come back.
The federal government is the CAUSE of businesses looking elsewhere for a less costly places to do business. They are doing nothing wrong. The unconstitutional federal government is the culprit. All tariffs do is punish the American consumer and actually increases the feds interference, NOT what we need.
Still waiting for Carrier and Nabisco to announce price reductions on their Mexican made products......
Won’t matter. By the time it reaches you, the tariffs will have probably forced the prices higher than what they are now.
It was against Reagans’ ideals but the Japanese were playing unfair.
And now the rest of the world plays unfair. We need a Trump to level the playing field.
Great post.
Reagan supported free trade but would take strong stands to prevent America from being pushed around.
That is exactly what Trump is saying.
The phony “principled conservatives" are not following Reagan's example.
It annoys my when they cite Reagan to cover for their corruption and hypocrisy.
At my local Ford dealer I asked if the Focus base price would be coming down now that they are made in Mexico. He said he didn’t think so but he would check for me. LOL.
33 Years Ago, Tariffs Saved Harley-Davidson Inc. -- or Did They?
"Because the tariffs affected only a relatively small percentage of bikes -- since motorcycles from Germany, Italy, the U.K., and elsewhere were granted exceptions to the tariffs and the Japanese were able to get around their effect while further innovating -- it's estimated the tariffs accounted for only 6% of the sales increase Harley enjoyed in the aftermath; the rest was due to the bike maker's own efforts."
Nice try Trump/Sanders Tariff fans. But you will have to do better than this.
detective wrote: “The article is from 1983 but it is very relevant today. The so called “principled conservatives” who oppose Trump brag about how they are the only true followers of Ronald Reagan.”
Reagan was up for re-election and decided to ditch his conservative principles to enhance his chances.
My argument is that tariffs hurt the consumer while helping the worker. Harley employed maybe 2300 workers. These tariffs increased the cost of motorcycles by about 10%. Why is it fair to the rider to have to subsidize the jobs of the worker when other higher quality and cheaper products are available? Also, the Cato institute argued that these tariffs cost more jobs in the retail economy that they saved in the production economy.
“trade agreements signed since 1983 make it impossible to impose tariffs to protect an industry now. If we impose a tariff we get taken to a foreign court where, to my knowledge, we have never won a case. If found not in compliance with the treaties, like GATT and NAFTA our trading partners get to retaliate with their tariffs. Those tariffs will target and destroy whole industries until we relent. We have ceded our sovereignty to foreign courts.”
The so called “principled conservatives” have destroyed American industry in the name of free trade.
America today is worse off than it was when Reagan was president.
That is all the more reason why we need someone like Trump who will support America and not the corrupt politicians we have in Washington today.
Trump believes in the Reagan principle of standing up for America. That is what we need today.
>Also, the Cato institute argued that these tariffs cost more jobs in the retail economy that they saved in the production economy.
And they’ve been consistently wrong as working class and now middle class take home pay is in decline.
Economics isn’t a real science so there is no way one can say “well it worked then so it will work now”. That being said Tariffs have a history of “working” well enough, at least better than the current system.
Correct. And a fact difficult to quantify but always totally ignored by the tariff supporters like Trump and Bernie Sanders.
They look at the good side, more Harley Davidson employees, while ignoring the bad side, higher motorcycle prices and less money spent elsewhere in the retail sector by motorcycle buyers.
The point is Reagan was willing to defend American industry and American jobs.
The corrupt politicians in Washington today are not. Trump is for free trade as was Reagan. But they both will take action to prevent America from being pushed around.
One tariff does not begin to tell the whole story. Harley Davidson was given time to improve its operations and its product and is still around today.
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