I am geared up for reciprocal, counter-reciprocal, and counter-counter-reciprocal tariffs with no one yet defining reciprocal.
In the name of reciprocity, the Wall Street Journal reports Harley-Davidson Wants Payback if Europe Targets its Bikes
A Harley-Davidson (HOG) isn’t cheap no matter where you buy it.
But if the European Union imposes a 50% retaliatory tariff on the company’s motorcycles in April, prices could reach astounding heights in Harley’s second-largest market by sales.
Consider the Road Glide, a touring model that starts at $28,000 in the U.S. In Denmark, the price tag is already around $77,000 once the country’s 25% value-added tax and 150% luxury tax are added.
The proposed new EU tariff, which officials said would be in response to levies imposed by the Trump administration, would take the Road Glide price to $124,000, the company said.
Harley said its products are afflicted by unfair trade policies in other markets, too. The company wants its overseas rivals to face reciprocal duties when they export bikes into the U.S.
“Competitor brands should not be allowed to take advantage of low-cost manufacturing and preferential import duty when accessing the U.S. market,” Jonathan Root, the company’s chief financial officer, told a congressional trade panel Tuesday.
Though the company says it is profitable in Europe, its business in the region has been shrinking. Some riders and dealers complain that the bikes have become too pricey and the variety too meager. Harley doesn’t compete in some categories popular in Europe and has failed to gain traction in others.
Another fateful step came a few years ago when Harley discontinued its least expensive motorcycle, the Sportster. It accounted for a third of sales volume in the European region, but the company called it a money loser whose decades-old engine didn’t meet modern air-quality standards.
The Sportster’s replacement, the Nightster, has a cleaner and quieter engine but hasn’t matched its predecessor’s appeal.
“They were significantly overengineered and too expensive, so we lost the entry level,” said Christian Arnezeder, a former leader of Harley’s central European operations.
Canada imposed a 25% retaliatory tariff in early March, while countries such as China, India and Thailand place even higher duties on the motorcycles, he said.
Meanwhile, Root said, bikes brought into the U.S. receive a 2.4% tariff at most. That imbalance is unfair to Harley, he said.
High-Cost Manufacturing
Everyone should have high-cost manufacturing. Combined with a crashing dollar and higher inflation, we can reach global Nirvana.
Meanwhile, please note the need for a reciprocal response to reciprocal tariffs. Canada imposed a 25% retaliatory tariff in early March, that Trump now needs to react to.
Before this madness started, we had USMCA and reciprocal tariffs, at least with Canada and Mexico.
Now to even things out from things that were already even, we may need counter-counter-reciprocal tariffs.
Making Sense of Counter-Counter-Reciprocal Tariffs
Everything will make complete sense on April 2, Tax Hike Liberation Day when Trump reveals his new and improved reciprocal tariff policy as currently modified.
I discussed Trump’s newly revised “Big and Simple” tariff plan earlier today in Trump’s Tariff Liberation Day Ceremonies Start Two Days Early With Confusing Statements
Across-the-board tariffs of up to 20% are back on the table ahead of April 2 “Liberation Day”.
Big and Simple vs 200 Clean Numbers
It seems to me that simple and 200 clean numbers, one for each country the US trades with, plus Trump’s commitment to be generous to certain countries appears to be contradictory.
However, as I have explained previously, contradictions and Trump are impossible. Thus big, simple, specific, hundreds, and changing rates on the fly, are not at all contradictory.
Please click on the above links for more discussion of the latest Big and Simple ideas.
What Does Reciprocal Mean?
One might think that reciprocal means we do to them what they do to us, since that is How Trump defines it.
But that is not at all what Trump means even though that’s what he now says.
USMCA was actually reciprocal in all but a few minor ways and Trump negotiated those ways.
In fact, Trump bragged about what a great deal he made.
I kid you not, according to Trump, Cheese Was a “Key Achievement” of Trump’s USMCA Trade Agreement
Please read the above post if you think the US is getting a rotten deal from Canada.