Attacking Harley Davidson not the solution for making America great

Harley Davidson is learning the hard way that President Trump is a fickle friend. He praised Harley Davidson as “a great American company” in his 2017 address to Congress, but in a series of tweets this week, he predicted “the beginning of the end” of Harley Davidson and threatened that the company “will be taxed like never before.”

Instead of attacking the iconic American company, the president should be thanking it for sending him a much needed wake-up call that his trade war is not such a good idea after all. Harley Davidson announced in a public filing that it would be moving production of motorcycles to be sold in the European Union from the United States to overseas. In response to Trump’s tariffs on EU steel and aluminum, the European Union increased the tariff on Harley Davidson motorcycles made in the United States and sold in the European Union from 6 percent all the way to 31 percent.

{mosads}That is a major problem for Harley Davidson since sales of its motorcycles in the United States are declining and it was looking to increase sales in the European Union to pick up some of the slack. The company estimates the EU tariffs will add a cost of $2,200 on average to those motorcycles and does not believe it is economically feasible or sustainable to pass those costs on to its dealers and retail customers.

So the company is doing what it must to take care of its shareholders, employees and customers. It is finding a way to minimize what it called in its public filing a “tremendous cost increase” that if transferred “would have an immediate and lasting detrimental impact to its business in the region, reducing customer access to Harley Davidson products and negatively impacting the sustainability” of its dealers.

Trump campaigned on the promise of bringing jobs, and especially manufacturing jobs, back to America. He boasted just last week at a rally in Minnesota that “we’re bringing back our jobs from other countries.” The timing was particularly awkward with Harley Davidson announcing just days later that it would in fact be moving jobs overseas.

The president is clearly peeved that Harley Davidson said it is moving jobs overseas due to EU tariffs, and that the EU tariffs were a response to the tariffs that Trump first imposed on EU aluminum and steel. The optics are not good for Trump, who was elected as a successful businessman who would know how to run our national economy like a well-oiled machine. The economy had been doing just that, but news reports stated the “trade war appears to have halted the Trump rally,” and that things might get even worse if other companies follow Harley Davidson’s lead.

It is outrageous that the president is attacking a company for doing what he surely would have done had he been at the helm. When Hillary Clinton accused Trump in a 2016 debate of not paying any federal income tax, he unapologetically retorted “that makes me smart” because the money “would be squandered” if given to the government. By the same logic lowering its tariff costs makes Harley Davidson smart.

But attacking Harley Davidson does not make the president smart. He tweeted his surprise that the company “would be the first to wave the White Flag” in his trade war. The president later tweeted that Harley had “surrendered,” predicted that “it will be the beginning of the end” for Harley Davidson if it moves, and threatened that the company “will be taxed like never before.” But as Sen. Ben Sasse (R-Neb.) observed, the “problem isn’t that Harley is unpatriotic” but rather that “tariffs are stupid.”

There is widespread agreement on that point. Trump’s former top economic adviser, Gary Cohn, decided to quit in part because of his opposition to the planned tariffs. Cohn declared he is “anti-tariffs” in in May and explained that it would hurt the U.S. economy “if we artificially raise the price of goods because of tariffs.” Cohn was not alone in his stance. In March, more than 100 House Republicans sent a letter to Trump asking him not to impose tariffs on EU aluminum and steel “to avoid unintended negative consequences to the U.S. economy and its workers.”

The president has lashed out at more than a dozen companies since being elected, including General Motors, Amazon, Carrier, Merck and a bevy of “fake news” media outlets. Trump declared in his 2016 victory speech that he “will be president for all Americans.” He apparently did not mean “for all American companies,” but he should have if “make America great again” is to be anything more than a campaign slogan.

Joseph Holt teaches negotiations and ethics as an associate professor at the Mendoza College of Business at the University of Notre Dame.