The Harley Davidson Trade War

Above, the massive Trans-Pacific Trade Deal (TPP) sits on Senator Jeff Sessions desk. 

This excellent report came from the Conservative Tree House.

Governor Scott Walker likes to display his rebel side (although it’s an illusion intended to solidify Tea-Party bona fides in optics only) by riding around on a Harley Davidson motorcycle.   After all, Harley Davidson is headquartered in Wisconsin.

Well, for now at least.

Wisconsin representative, now Speaker of the House, Paul Ryan, also likes to tout his form of fiscal conservatism.  However, as the former Chairman of the budgetary ways and means committee, a federal budget is also an optical illusion (hasn’t been one since ’07).

Well, given Paul Ryan’s full-throated endorsement and promotion for the Trans-Pacific Trade Deal (TPP), perhaps the Wisconsin working voter would like to see exactly what they have in mind for you.  Remember, each of the aforementioned has also endorsed Senator Ted Cruz – who, not coincidentally, was the co-author of the Trade Promotion Authority bill (TPA) which was the vehicle to insure TPP’s passage.

Rather than go through all of the tentacles, and difficult to understand TPP construct, let’s instead use that wonderful Scott Walker (Harley Davidson motorcycle) example to show Wisconsin voters what’s really going on.

Representative Paul Ryan and Senator Ted Cruz created the legislative vehicle for The Trans-Pacific Trade Partnership, or TPP.    The legislative vehicle for TPP is called Trade Promotion Authority, or TPA.

Both Ryan and Cruz were actually quite proud of TPA, until candidate Donald Trump made a campaign issue of the trade deal.   Senator Cruz now claims he doesn’t support TPP.

However, these trade deal constructs did not happen by accident, they were built and designed for a reason.   The Wall Street connections to TPP brings the presidential election race into the more broad agenda, and that’s where you find a geographical relationship which immediately connects RNC head Reince Preibus.

You see, sometimes you need to step back to see the larger picture.

The RNC/GOP were bedfellows in 2014 along with the U.S. Chamber of Commerce and its president Tom Donohue.  The U.S. CoC worked earnestly to get the Trans-Pacific Trade Deal constructed.  Donohue being the CEO in charge of the U.S. Business interests, via the Chamber, who were doing the actual trade deal negotiations.

The U.S. Chamber (Donohue) also needed a legislative path.  As a consequence the path needs legislatures as bill sponsors.  That’s where Paul Ryan and Ted Cruz come in to the picture.  Together in early 2015 they penned an Op-Ed which appeared in the Wall Street Journal, and also is available HERE.

How they actually worked in the House and Senate to get the trade vehicle, TPA, through the legislative system is quite remarkable.  FULL DETAILS HERE.

When we say “remarkable”, we really mean it.

When it is possible to usurp the will of the people, and simultaneously position yourself as outside of the construct therein, such Machiavellian plausible deniability should at the very least be recognized as brilliant.    TPA was a brutal scheme.  TPP is devastating to the U.S.  But the way Ryan/Cruz guided TPA through the House and Senate was brilliant nonetheless.

And that is where Wisconsinites (Preibus, Ryan, Walker) align with a unity agenda within the deal itself.  A deal constructed by the U.S. Chamber of Commerce, that entirely benefits Wall Street.

Can you see now how the 2014 GOP roadmap gains increased importance, and how Presidential Candidate Scott Walker became part of the entire 2016 nomination scheme?    Follow the money.  Yes, including the Ricketts money.

Beyond the terrible legislation is the actual TPP trade deal itself; and beyond the TPP are the consequences to the U.S. manufacturing base and U.S. worker.

For an example of those consequences we turn to the beloved Harley Davidson.

A few years ago Harley Davidson opened a plant in Northern India, yes India.

[ Remember the Wisconsin Sikh Temple shooting – did you see those police at the CNN town hall questioning Donald Trump? ]

Coincidences are funny that way. I digress.

The Street motorcycles being sold in the U.S. will be manufactured in the Milwaukee-based company’s Kansas City facility, Wandell said. The Street bikes for international riders will be made in the company’s Bawal, India, plant that opened in 2011.

Harley-Davidson (NYSE: HOG) currently assembles motorcycles in India and Brazil to avoid tariffs, but the parts are made in America and shipped as a kit to those countries. (link)

Harley Davidson in India?  Many die-hard hog fans were worried that Harley was going to start building their bikes out of country.  Given what happened to the auto industry can you blame them for worrying.   However, that wasn’t immediately what was happening, because Harley Davidson USA knew their bikes lived and died on the reputation of being “American Iron”, despite many of the parts made over seas.

However, India has a 100+% tariff on motorcycle imports.  When combined with other import taxes and duties it all adds up to a staggering 115% cost increase to sell a U.S. manufactured Harley in India.

India also has a population over a billion people.  A very large market!  But selling an expensive bike in a poor country with a 100+% import tariff makes the market virtually untouchable.  Unless…

….“We can make (the price) more attractive in those markets by building over there,” Blankenheim said

To work around the problem, and simultaneously set themselves up for future market opportunities, Harley Davidson built a plant in India.    If the Harley is built in India it can be sold in India for less than half the price of building in the U.S. and importing it.

However, the future opportunities angle stems from India not only building their own Harleys, but also manufacturing most of the Harley’s sold on the international market as well.  Build here and export from the U.S. and you find a big tariff at the destination; but build in India and export from India and the tariffs are avoided upon arrival.

How does this help the U.S. manufacturing of Harley Davidson?  How does this help jobs here in the U.S.?  How does this help the U.S. factory worker?

It doesn’t.

But the corporate side (Wall Street / NYSE “HOG”) books of Harley Davidson look great.

See how that works?

In essence, Harley USA will build Harley’s for the USA (disclaimer: “for now”), and Harley in India will build for most the rest of the world.   They are still in the working-out-the-kinks-process part of the global plan, but it is a plan being executed.

So you might ask if India, with a billion citizen market, charges a 100% tariff on U.S. manufactured product, well, what’s the tariff the USA charges to import a motorcycle here from say, Japan?

Well, that would be 2.4%.

Yes, a measly 2.4%

But, wait, it gets better – that is going away too:

America will remove a tariff levied on Japanese motorcycles with engine displacements of over 700cc under the recently announced Trans-Pacific Partnership trade pact (TPP), which includes Australia and covers 40 percent of the global economy.

The 2.4 percent duty will be eliminated five years after the multilateral trade deal takes effect, which should, in theory, reduce the price of motorcycles in the over 700cc space in America, placing the imported fare on the same level playing field as home-grown marques like Harley-Davidson, Indian and Victory. Those marques mainly focus on bikes with engine capacities of more than 700cc.

America currently imposes no tariff on imported motorbikes with engines of 700cc or lower (link)

Are you seeing the problem yet?

If the U.S. export of a Harley Davidson incurs an import tariff at the destination (say China 30%, or Vietnam 40%), but the same tariff does not apply when the import arrives from India, what nation do you think will be manufacturing the Harley Davidson motorcycles which appear in China?

Meanwhile, the U.S. unilaterally disarms in the import tariff battle, and drops all import tariffs on the foreign motorcycles which will directly compete with those very same remaining Harley Davidson motorcycles which ARE made in the U.S.A.

Do you remember the Wisconsin Radio Host Charlie Sykes interview of Donald Trump when Sykes climbed atop his high horse and so “righteously” told Trump that Wisconsin is an Import-Export state, and tariffs hurt their economy? etc. etc. etc.

How does that Sykes gibberish look against this example now?

We are only using Harley Davidson as a representative example based on geography (Wisconsin).  This horrific Trade Deal applies nationwide in all areas of manufacturing, import and export.

Scott Walker will be fine, he’ll probably end up on Wall Street.  Speaker of the House Paul Ryan will be fine, he’ll lock in a multi-million lobbying contract.  Reince Preibus will be fine, he’s already got a rolodex filled with Global Bankers and High Financiers.

It’s the ordinary middle-class Wisconsin cheese-head voter who will be impacted.

Are they foolish enough to be co-dependents to their own financial demise?

I guess we’ll find out….

Wisconsin Values ?

Reference Notes – If you want to compare trade tariffs, examples as shared, on these motorcycles imports and exports you can go HERE to the duty calculator and select engines > 970cc (the first three duty comparison checks are free – after that the website charges for use).

Next time you are in a grocery store, pick up a package of Nabisco Fig Newtons, look at the small wording next to the ingredients and you will see “made in mexico”.  It’s the same poor trade deals that are creating the same outcomes.

¹/Also, Hat Tip to “SEVENTHNDR“ for sourcing.

²/How Ted Cruz and Paul Ryan hoodwinked America HERE

³/Senator  Jeff Sessions discusses TPP HERE and Audio HERE

Just a Reminder, this is an insurgency. – The modern enemy of Wall Street is Main Street vulgarians. The current enemy of the RNC/GOPe is not Democrats, it’s Grassroots Conservatives; Common Sense Conservatives; more vulgarians.

The Republican Party, and the Republican media apparatus, view us as their enemy. We are the enemy they need to protect themselves from:

In 2014, the RNC approved selection rules that govern how each state’s delegates are portioned out from the primaries. Under one of the changes, states holding their primaries between March 1 and March 14 will have their delegates doled out proportionately with election results, a change that will likely stymie a movement candidate.

States that have primaries on or after March 15 will be winner-take-all states.

That’s important because another RNC rule change requires that a candidate must win a majority of delegates in eight or more states before his or her name may be presented for nomination at the 2016 Republican National Convention.

With 18 GOP presidential candidates, for now, it will be that much harder for any candidate to win a majority in any state, let alone eight. (Article July 2015)

Now, ask yourself, why would the RNC want to “stymie a movement candidate“? Who exactly does that benefit? Obviously, the “non-movement” candidate, ie “the turtle“.

Isn’t the entire reason for campaigning in Iowa, New Hampshire, South Carolina etc. to make a movement/momentum?

In addition Rule #40 changed in 2014 from previously five needed state wins, to a newer threshold of eight (8):

Officially, it’s Rule 40 in the RNC handbook and it states that any candidate for president “shall demonstrate the support of a majority of the delegates from each of eight (8) or more states” before their name is presented for nomination at the national convention. (article March 2014)

Again, ask yourself who does this benefit? A candidate can win seven states outright, and still not have their name presented for nomination?

These rules were made/affirmed in 2014 – Who or what exactly was the GOP concerned about blocking in 2016 that would necessitate such rules? When combined with other rule changes you can clearly identify a consolidation of power within the RNC apparatus intentionally constructed to stop the candidate of the GRASSROOTS from achieving victory.