Bill Poulos graduated from the University of Michigan with an MBA and degree in finance. Prior to attending the University of Michigan, he earned his degree in engineering from GMI (General Motors Institute). Bill Poulos worked for General Motors for over 30 years—starting on the shop floor, working his way up the corporate ladder, and retiring as an automotive executive. Bill is a published author and humanitarian. Below Bill offers insight into the recent developments between Harley-Davidson and Trump over the current tariff/trade war.
In the midst of the ongoing tariff wars that Trump has initiated with our trading partners (both our allies and our adversaries—such as China), for some reason, Harley-Davidson chooses to announce they’re going to move production from the United States to Europe, ostensibly due to the European tariffs placed on Harley-Davidson products.
A little background on the matter: Harley-Davidson’s type of motorcycle is not exactly very popular in Europe. Europe, with their small winding streets and towns, have historically opted for what would be viewed as little motorbikes and mini motorbikes, not big, honking Harley-Davidson motorcycles. But there’s still a market there for them but it’s a limited market.
It’s curious that Harley-Davidson would make this announcement in the midst of Trump’s initiative to, after years of our trading partners taking advantage of the United States, try to overcome the disparity. Trump is not just trying, he is already effectively overcoming that disparity and already getting our trading partners to make concessions in favor of the US.
So, how is Trump going to make trade agreement changes in favor of the US? He’s doing it with, of course, tariffs. Some real, some imagined, some threatened, some imposed, but none of them expected to be permanent. That’s what everybody’s missing. They’re all having apoplexy over these tariffs as if they’re going to be permanent and, of course, they’re not. They’re just negotiating chips that Trump is using as leverage to gain parity when it comes to trade.
So why would Harley-Davidson announce this move in the midst of all of that? A smart company would wait and let these negotiations play out at the geopolitical level before making such a decision. This is because before the day is done, or before the month is done, or the year, certainly Trump will have the European Union either removing or certainly relaxing the tariffs that are currently imposed on products—like Harley-Davidson motorcycles. So they could be looking foolish as a company by having to reverse their decision when that day comes.
Now, this disparity in the US trade with its major partners is not imagined. It’s not just Trump saying it. It’s real. I personally have experienced it during my time with General Motors, working with the Germans at the Opel. They had an Opel operation, which was then a subsidiary of General Motors and as such. I was well-familiar with Opel’s competitors (directly or indirectly), including BMW and Mercedes. Although Opel didn’t compete directly with them, they did so indirectly. I think the Germans enjoyed almost unfettered access to the US markets, exporting BMWs and Mercedes into our market, with hardly any restrictions. I think the Germans would actually be amused by the Americans.
They would laugh at us for a couple of reasons. One, for letting them into our market without any restrictions to speak of while they, on the other hand, had all kinds of restrictions in terms of importing US products, US automobiles. Second, they jacked the price up because of the mystique around a BMW or a Mercedes, so they had the Americans fooled twice. American’s were paying too much, and they were not allowed to reciprocate and export into Europe. That’s been going on for decades, so Trump’s exactly right.
These are things you’ll never hear from the media because why? Their agenda is for Trump to fail. There’s no question about that. So, don’t look to the media for any wisdom on the subject.
So, my advice to Harley-Davidson is hold off. Hold off to see what happens. Let Trump do his work, and you’ll be happy you did.