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How Harley Davidson may expose another problem with tariffs

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How Harley Davidson may expose another problem with tariffs

The logic that many on the right and even some on the left understand about tariffs is the increase cost to overseas producers inevitably falls back on the American consumer. This is the primary argument made by many federalist-minded Libertarians and Republicans who oppose President Trump’s continued embrace of the practice. As we’re now seeing, there’s a potentially bigger problem with these tariffs.

Instead of bringing jobs back to America, they can actually drive jobs overseas. Case-in-point: good ol’ American Harley Davidson.

The motorcycle company that for many embodies the American rebellious spirit is at a crossroads. The European Union has raised its tariffs on American-made motorcycles from 6% to 31% in response to President Trump’s tariffs on steel and aluminum.

US to hit EU with steel and aluminum tariffs, report says

https://www.theguardian.com/us-news/2018/may/30/trump-administration-tariff-steel-aluminum-eu-trade-tensionThe move is likely to bring retaliatory action from European Union trade regulators, who have warned they will target US products as motorcycles, jeans and bourbon if additional US tariffs are imposed.

Signs of increasing friction between the US and Europe over trade came early on Wednesday when Wilbur Ross, the US commerce secretary, drew a sharp line with the EU over Chinese trade negotiations, telling counterparts at a trade development panel in Paris that Europe is using tariffs as an “excuse” to refuse trade negotiations.

Predictably, Harley Davidson is in a precarious situation. They must decide whether to continue exporting to Europe and pay the tariff, which averages around $2,200 per finished motorcycle, or move a portion of their operations to Europe to avoid the tariff. While they’re unwilling to admit it at this point, the latter will almost certainly force the company to cut it’s American workforce and even shut down some of their domestic facilities.

This isn’t the type of result we were promised when the President was selling us on tariffs, but it was easy to foresee.

Free trade works when it’s done right

The President was correct when he bashed NAFTA and TPP. However, his reasoning for doing so was wrong. Free trade empowers the real job creators in US companies to put Americans to work. It also allows for many to move jobs offshore, but the benefits of a freedom in trade greatly outweigh the detriments. As some jobs move offshore, more jobs are subsequently created in America.

NAFTA and TPP were never really free trade agreements. NAFTA was trade redistribution that ended up being detrimental to the whole continent and TPP was a handover of power to multinational companies without the benefit of proper oversight. To use them as the reason for imposing harsh tariffs and abandoning free trade is a farce. As a self-proclaimed master negotiator,Trump should have made better deals and embraced free trade. Let Americans go head-to-head with companies in other nations. Put their cheap workforce against our innovations and financial prowess. That type of free trade is good for them and better for us.

Harley Davidson won’t be the last company forced to make hard decisions because of the tariffs. Our best case scenario is that damage can be mitigated and some jobs truly do come back. Unfortunately, that may be wishful thinking.

Reference

Harley-Davidson offers no further detail on overseas production shift as European tariffs take hold | PennLive.com

https://www.pennlive.com/news/2018/07/harley-davidson_offers_no_furt.html“We never contemplated moving our European volume out of the United States,” Olin said Tuesday.

“Consequently we’re analyzing the capacity options that we have… and we are working on the overall plans, and when we have them we’ll provide more information.”

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Democrats

Veronique de Rugy: Green New Deal would be hundreds of TRILLIONS of dollars in federal commitment

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Veronique de Rugy Green New Deal would be hundreds of TRILLIONS of dollars in federal commitment

If there’s a word that’s not necessarily negative one could use to describe the Green New Deal, it would be “ambitious.” The deal has so much wrapped into it that it’s hard to tell which components are designed to save the environment and which ones are intended to destroy the economy.

Estimates put costs for the “green side” of the resolution at somewhere between $12-$20 trillion. Then, there’s the Medicare-for-All component that is estimated at $32 trillion over a decade.

And that’s just the start.

This isn’t just a “green” deal. It’s a hodgepodge of policy proposals that include massively growing the welfare state, inserting government even more into the job markets, and a universal basic income that they refuse to actually call a universal basic income. The much-maligned FAQ that was posted and quickly removed from the website of sponsor Alexandria Ocasio-Cortez (D-NY) mentioned paying people who were unable or even “unwilling” to work.

“Even in the best case scenario where you substitute a UBI for all the other forms of welfare, it’s insane,” said Veronique de Rugy, Senior Research Fellow at the Mercatus Center at George Mason University, on ReasonTV.

But here’s the problem. The Green New Deal doesn’t substitute a universal basic income for other welfare programs. In the Green New Deal, the programs recommended are supposed to be additions, not substitutions.

“It’s a really hard system to support even in its ideal form,” de Rugy continued. “Then there’s this Green New Deal version which doesn’t even seem to entertain this notion of actually substituting for all the rest, so it’s on top of what we have now.”

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The real question we need to ask is whether or not the Democratic Party is actually going to support this. In its current form, the Green New Deal is a fantasy, and perhaps that’s what the more-sane Democrats are shooting for by supporting it. By giving it their attention now, they can work their way down to more reasonable proposals for everything from environmental protection to job creation programs to different versions of socialism.

In other words, they may be using the hyper-leftism of the Green New Deal as a gateway to get to the palatable leftism of what’s quickly becoming mainstream socialism.

The Green New Deal shouldn’t scare conservatives because it can’t happen. What should concern us is the end result negotiated down from this starting point. Given the GOP’s negotiating track record lately, we don’t know what we’re going to get when the Green New Deal is trimmed down to reality.

 


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Democrats

Even Drudge can’t deny the insane spending by Washington DC today

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Even Drudge cant deny the insane spending by Washington DC today

What did GOP control of the House, Senate, and White House do to spending and the national debt? Did Republicans demonstrate the fiscal responsibility that has been one of their alleged traits for decades? Did they match the spending under Presidents Bush and Obama, maintaining the status quo? No, and no. They looked at the spending and debt accumulation of the past and said, “Hold my beer.”

It’s not just the Republicans’ fault, but asking Democrats to stop them when they’re on a spending spree is like asking a bartender to stop serving alcohol. It just doesn’t feel right to them and the results of bipartisanship have been quite apparent, as my friend Daniel Horowitz noted on Conservative Review:

The bipartisan spending binge is now worse than under Bush and Obama

https://www.conservativereview.com/news/bipartisan-spending-binge-now-worse-bush-obama/It feels like it was yesterday when I was watching the news as a kid with my parents in 1995, listening to Newt Gingrich, during the infamous shutdown fight, warn about the dire consequences of crossing the $5 trillion debt milestone. It feels like it was yesterday when I was writing press releases for candidates in “the year of the Tea Party” on how Obama and the Pelosi Congress took the debt to $14 trillion in such a short period of time. Now, over eight years into varying degrees of GOP control of Congress and the White House, we have crossed the $22 trillion mark, expanding the debt more rapidly than at any time in our history. Whereas the debt exploded by $5 trillion during Bush’s eight-year tenure, a shocking figure at the time, it has now increased $8 trillion just since Republicans controlled the House in 2011 and by $4 trillion over the past four years, since they controlled at least two of the three political organs of government.

It has become so bad that even Matt Drudge, whose conservative news aggregator Drudge Report has been consistently defending President Trump since well before the 2016 election, is starting to ask questions.

Drudge Spending Binge

Washington DC has had a spending problem for a century. Republicans run on solving this problem during election time, but they’re acting like Democrats between elections. It’s time to let them know we’re watching and we’re not happy about it.

 


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Economy

Trump administration is optimistic about failing economic policies

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Trump administration is optimistic about failing economic policies

In an article I wrote last week following Trump’s campaign rally disguised as a State of the Union Address, I documented how his claim that his trade war and tax cuts had produced “the hottest economy in the world” were merely the rhetorical ramblings of a failed “Republican” running for re-election.

Trump’s trade war has created an economic hell that will take years to recover from, and his tax cuts have failed to provide tax relief for the middle class. In addition, when you throw Trump’s big-government spending into the mix, the federal deficit now exceeds $22 trillion.

The stock market fell late in 2018 and all gains made in the year were wiped out, a crash the administration blamed on Democrats and Fed Chairman Jerome Powell.

While the slide on Wall Street was dismissed as a market correction, recently released economic data from the Commerce Department shows that the overall economy ended the year much worse than the White House would have you believe.

U.S. retail sales recorded their biggest drop in more than nine years in December of 2018 as receipts fell 1.2 percent across the board. This is the largest decline in retail sales since Sept. 2009 when the economy was in a recession.

Trump brags about low unemployment numbers, but according to a Department of Labor report released yesterday, unemployment claims increased by 4,000 to a seasonally adjusted 239,000 for the week ending Feb. 9th.

While it’s tempting for some to dismiss yesterday’s report as an anomaly, let’s take a look at the data from another angle.

The four-week moving average of claims — considered a better measure of labor market trends because it irons out week-to-week volatility — was 231,750, an increase of 6,750 from the previous week’s revised average. This is the highest level for this average since January 27, 2018 when it was 234,000. The previous week’s average was revised up by 250 from 224,750 to 225,000.

Of course, the administration famous for identifying unfavorable news as “fake” went right to work trying to spin these economic failures into policy victories.

Saying that he was still “optimistic” about the economy, White House Economic Advisor Larry Kudlow called the retail sales number a “glitch,” and he invited the feds to “step aside” while praising the president for “ending the war on business.” He then parroted SOTU talking points about how the overall economy was “very strong” despite these recent reports.

There are those who label me a pessimist because I refuse to whitewash the political graffiti of optimism Trump and the GOP spray paint on their crumbling wall of lies and broken promises, but in the words of C. Joybell C.: “Some people are optimists. Some people are pessimists. I’m just a realist who believes that some things are worth fighting for.”

Originally posted on StridentConservative.com.

 


David Leach is the owner of The Strident Conservative. His daily radio commentary is distributed by the Salem Radio Network and is heard on stations across America.

Follow the Strident Conservative on Twitter and Facebook.

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