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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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Economy

Gary Vaynerchuk never talks about politics, but he’s great when he does

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Gary Vaynerchuk never talks about politics but hes great when he does

Language warning, in case you’ve never listened to Gary Vaynerchuk before. I have, and he’s great.

Those who know of Gary Vaynerchuk think of wine, social media, and digital strategy. The Belarusian American entrepreneur has been an outspoken advocate of all things “віно і маркетинг” for over a decade, but he rarely speaks about politics.

Recently, he did, and one prediction in particular caught my eye.

In an interview for Capitalism by Ryan Daniel Moran, Vaynerchuk said, “I believe we’re seeing the beginning stages of a four party system in America in the next 50 to 100 years.”

The way he sees it, both major parties are pushing to the extremes on the ideological scale, opening up spots for moderate progressives and moderate conservatives to have major parties of their own. This is the case in most countries; the United States is one of the few that has a true two-party system despite the fact that most of our founding fathers didn’t want it to turn out this way.

John Adams said:

There is nothing which I dread so much as a division of the republic into two great parties, each arranged under its leader, and concerting measures in opposition to each other. This, in my humble apprehension, is to be dreaded as the greatest political evil under our Constitution.

But Vaynerchuk, who has built a career around being write much more often than he’s wrong, says the opening is already being seen today. He railed against both parties, blaming both Presidents George W. Bush and Barack Obama for poorly handling the financial crisis of the late 00s.

Millions have learned over the years to listen to Gary Vaynerchuk when he’s offering opinions. Though his political opinions are few and far between, there’s a wisdom to them you don’t hear from the pundits. It’s authentic, a rare quality indeed.

Petition Capitol Hill for Term Limits

Sign the petition. We demand Congress immediately put together legislation that spells out term limits for themselves. Americans need to know who is willing to suppress their own power for the sake of the nation. This can only happen by bringing legislation to the floor.

Will you help revive the American Conservative Movement?

 


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Economy

Charlie Kirk: Capitalism saves lives

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Charlie Kirk Capitalism saves lives

I’m normally not a fan of quick bursts of talking points, preferring longer, fact-filled discussions on topics as important as capitalism versus socialism. With that said, Turning Point‘s Charlie Kirk knocks it out of the park with talking points that totaled 33 seconds.

But even though the video was short, this article will take a bit longer to read. I’m not going to talk about the clear evidence that capitalism is far superior to socialism (or any other economic -ism). Instead, I’d like to focus on the challenge pro-capitalism activists face. Our message is right, and for the most part our nation accepts this. But things are changing. The indoctrination in schools combined with the propaganda in mainstream media and the false narratives from Democrats are all combining to deceive the masses in ways many thought impossible just a few years ago.

Would you have thought over 50% of college students would support socialism over capitalism at any point in American history if someone told you that a decade ago? If you would have, you’re much smarter than me. I couldn’t imagine the will of the people being so misled that many would abandon the system that has clearly worked in exchange for a system that has never worked. It makes no sense, and therein lies the problem with the progressive movement today.

As our EIC noted, logic doesn’t always prevail.

We must, as conservatives, continue to push out the right message. We might think it’s commons sense, but apparently common sense is becoming less common in America. We need to keep pushing.

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Economy

Executive order targeting Huawei is the right move at the right time

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Executive order targeting Huawei is the right move at the right time

American technology companies, particularly those in the telecommunications industry, have been fools for far too long. While China as actively and aggressively sought to not only steal our technology but subvert it by inserting their own untrustworthy components into our systems, many American companies have turned a blind eye to the threats they pose to every American.

That won’t happen anymore. President Trump signed an executive order defending against technological attacks by the Chinese and specifically targeted Huawei, the Chinese telecomm giant that has been inserting itself rapidly into as many technological conversations as it can all across the world.

The right move

There are certain aspects of protectionism that do not appeal to me, but when it comes to technological protectionism, I’m all in. For years I’ve done what I can to limit the amount of Chinese technology in the devices I use for one simple reason: I don’t trust them.

Yes, they’re cheaper. But they’re also cheaper in the way they’re produced. Though China has made many technological advances in recent years (much of which can likely be attributed to theft of technology from other countries), they’re still behind in most regards compared to Japanese, Korean, Israeli, Australian, and European technologies. But that’s not a huge deal at this point; you get what you pay for and if certain sacrifices to quality make sense, so be it as long as it’s cheaper.

But there’s a nefarious aspect to the way the Chinese have inserted their technologies into the global mix. China has a very poor track record of obeying international laws, adhering to security protocols, and believing in the right to privacy. In China, there is no privacy which is why their technology often bypasses privacy controls put in place to protect individuals.

With the growing 5G infrastructure at the center of this move, now is not the time to take risks. If Huawei cannot be trusted, then 5G is the last place we want them involved.

I’m not a fan of executive orders, either, but this is one that makes sense since it’s a dynamic topic that moves much faster than Congress can handle and it’s administrated solely by the executive branch.

The right time

It’s obviously not a coincidence that this executive order was signed just as the trade war with China is ramping up. As our EIC noted, we’re in a time when we must use full measures to win this war. I’m not a fan of tariffs, but if we’re going to use them, let’s make them effective and get rid of them as quickly as possible.

This is just another arrow slung at the Chinese in that trade war. It may be technically separate and it’s hard to imagine this is another bargaining chip, but it will cause further harm to the Chinese economy, making it more likely they’ll come to the table ready to make a deal.

We’ve reached a moment in history where technology can have catastrophic effects on the lives of nearly every American if the wrong actors are allowed to run free in our infrastructure. This is a step towards safeguarding us from the threats.

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