Posted on 03/31/2016 5:19:29 AM PDT by Hojczyk
U.S. RAISES TARIFF FOR MOTORCYCLES By CLYDE H. FARNSWORTH, Special to the New York Times Published: April 2, 1983 WASHINGTON, April 1— 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.
The only comparable trade action by this Administration, the President's decision last May to impose quotas on sugar imports for the first time since 1974, was aimed at an entire industry.
''We're delighted,'' said Vaughn L. Beals, Harley-Davidson's chairman. ''It will give us time that we might otherwise not have had to make manufacturing improvements and bring out new products.''
But it brought angry reaction today from Japanese officials and a threat to file unfair-trade charges against the United States in Geneva.
''We consider it unfortunate that the American side decided to take this kind of drastic measure,'' said Hiroshi Ota, counselor for public affairs at the Japanese Embassy here. He added that Japan was considering taking a formal protest of the action to the General Agreement on Tariffs and Trade.
The action, which becomes effective in 15 days, affects large highway motorcycles with an engine displacement of more than 700 cubic inches,the only market in which Harley-Davidson now manufactures. It would raise the current tariff of 4.4 percent to 49.4 percent in the first year of the five-year program.
(Excerpt) Read more at nytimes.com ...
Exactly. Tariffs are backdoor bailouts for poorly managed companies with a thin coating of patriotism to make them easier to swallow.
Regarding motorcycles, I remember how badly off the American industry was in the early 80's. During Christmas break while in grad school I worked a part time job in a little store that sold a few jacket patches, one of which read "I'd rather see my sister in a whore house than my brother on a Jap bike". The last American producer was about to go belly up and needed some help. Reagan was a genuine conservative but he never let philosophy supersede his patriotism or willingness to do what was right.
“affects large highway motorcycles with an engine displacement of more than 700 cubic inches”
Holy crap! Those are some big engines!
Seriously, I’m guessing they meant 700 cc’s (cubic centemeters).
“Exactly. Tariffs are backdoor bailouts for poorly managed companies with a thin coating of patriotism to make them easier to swallow.”
They are also bailouts for union dominated industries. Isn’t it amazing how many in this forum are against raising the minimum wage insisting that it kills jobs but are in favor of tariffs?
BTW, Did you know that the US currently imposes tariffs on 12,000 items? How many tariffs do we need?
Tariffs aren’t the answer, think more conservatively. Instead of increasing prices for consumers by raising tariffs, try decreasing corporate taxes to encourage investment in manufacturing again. Dead is right, a tariff is no different than a bailout, except that instead of just letting one company fail by not bailing them out, thereby limiting one choice for consumers, you limit an entire sector of choices via price increases.
I ended up with a Nighthawk 700S instead of 750. Honda shrunk the engine 50cc to avoid the tariff.
Someone wanting, say, an Interceptor 1000, was out of luck - pay the punitive tariff or buy used.
Tariffs aren’t the answer when the question is “how do we bring manufacturing of a product back on-shore”. In this case, I think the tariff was the right thing, because it wasn’t permanent, and wasn’t meant to allow a badly-functioning industry to keep business-as-usual. Instead, the industry in question had a viable plan for improvement, and followed through. Just as soon as HD recovered from the butchering it suffered at the hands of AMF, the tariff was lifted and HD had to compete on its own merits again.
A good example of an industry being shielded from its bad decisions by something like a tariff is the civilian gun industry in India. Since there is no way to get access to well-made firearms due to a total ban on imports (the ultimate tariff), the Indian gun makers continue to get away with producing shoddy, badly-designed products. If they had to compete on a level field, they’d be out of business in a week.
Ditto the motorcycle industry there. Although importation is allowed, the tariff of 104% on imported fully-built bikes drives them out of reach for the vast majority of the population. A combination of the gradual growth of the Indian middle class, combined with a few makers managing to get assembly lines put in so they can finally sell bikes at Indian market rates, has allowed foreign bikes to start making inroads there. The result has been a recent and fairly dramatic upswing in quality and modernization of Indian-made bikes to stay competitive. Even if the foreign bike costs twice as much, Indians seem willing to pay to get access to the greater power and better refinement, and the indigenous companies have had to play catch-up to maintain sales.
Well, then. That settles it. Trump is the second coming of Reagan.
Reagan's tariffs were employed to protect against foreign dumping for industries THAT EXISTED at the time. They failed due in part to union labor costs and in part to poor quality.
Trump's tariff proposals are for goods that are produced overseas, NOT HERE. He wants to tariff Chinese plastic toys, Indonesian t-shirts, Korean TVs, Taiwanese electronics........none of which are produced in any meaningful fashion here. It will results in higher prices to the consumer and tariffs being employed on completely unrelated items that we ship there.
Reagan and Trump should not even be uttered in the same sentence. If you want to promote your boy, do it on his merits,
My Honda pickup is manufactured in Alabama.
Of course Harley has gone on to be the most successful motorcycle company in America and arguably the world. They probably wouldn’t be here today but for the tariff. Reagan had an intuition about doing the right thing.
Remember, this wasn’t exactly fair trade. There had been a huge boom in motorcycling (actually because of fine Japanese motorcycles) but by the mid-80’s it was a bust. The Big Three Japanese companies were not just selling bikes here, they were Dumping them here, hoping to save their jobs and companies. They may not have been intentionally killing H-D, but that was what was going to happen. The 700cc limit did not affect the 750cc bikes in performance much, but it discouraged the Japanese from going immediately to big bore cruiser and gave H-D breathing room, and the H-D investors some confidence that the Feds had their backs for a bit.
Thanks, Ronnie Reagan. (Disclosure I’ve owned numerous bikes, never a Harley. Current daily rider is a fast red Triumph triple.)
“I believe that Harley told the government it didn’t need the tariff anymore before it expired.”
Yes, Harley asked the government to repeal the tariff one year early, and it was removed.
Saved Harley.
Personally, I was against this tariff.
Harley, just like GM should have gone into receivership.
Harley would have quickly been brought back to life and would be just as well off as they are today.
They built a horrible product back then that did not even have an electric starter.
Japanese and German bikes were far superior to the American trash that was being produced.
Of course, there will be some FReepers who disagree with me - it’s likely they are behind a pair of ‘ape hangars’ wearing a bandana and smelling badly.
Not MY style.
Nighthawk 700S was a great bike. Way ahead of its time and could still smoke any stock Harley with only 700 cc. I had two of these. Tariffs are bad because it encourages the other country to do the same. So there is probably no net gain. Harley would have survived just fine without the tariffs.
Little secret: Honda helped HD make better engines. They went to HD and showed them how. Anyone thinking they have bought “American iron!” by buying an HD has really bought parts from foreign sources and designs from the Japanese.
I definitely don't know "woulda coulda shoulda" when it comes to their financial situation.
They built a horrible product back then that did not even have an electric starter.
Yes they were bad, the "hen's tooth" was a 79 Sportster and it sounds like no two were alike.
Japanese and German bikes were far superior to the American trash that was being produced.
Arguably they still are but there is more to it than the greatest or fastest bike.
Of course, there will be some FReepers who disagree with me - it’s likely they are behind a pair of ‘ape hangars’ wearing a bandana and smelling badly.
I like my Heritage and the fuel injection helps the thing start for people who can't figure out how to use a carburetor. But idle sounds like a Honda. Now they've added liquid cooling to the heads of the new models which is blasphemy to me.
“I’d rather see my sister in a whore house than my brother on a Jap bike”
.........................................................
Exactly my sentiments. I will NEVER drive a Jap car!
Porsche has been helping Harley make Engines for a while.
http://www.porscheengineering.com/peg/en/services/ourreferences/harleydavidson/
https://en.wikipedia.org/wiki/Harley-Davidson_VRSC
My first motorcycle was a new 1982 Yamaha bought in 1986. They were slinging them over here and stacking them deep.
I agreed with the tariff, because it addressed a specific market inequity and was temporary. Protectionism is not always a dirty word.
And the result, today, is a motorcycle market more diverse than ever, with two domestic brands, and strong showings from the Japanese and European makers.
The Nighthawk was a continuation of the first "super bike" and first UJM (Universal Japanese Motorcycle), the 1969 Honda CB750. So, yes, truly a great bike. The fact that it was built basically the same from 1969 to 2007 shows how good was the original concept.
Harley was saved, but what was the impact on consumers? US motorcycle sales dropped from just over 800,000 units in 1983 to about 550,000 units in 1987. The average price of a Harley went from about $6,000 in 1983 to about $8,000 in 1987. How happy are consumers going to be when there weekly trips to Walmart cost them an additional 25%?
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