Reason.com

Free Minds & Free Markets

Trump's Threats to Stop Harley Davidson From Fleeing Do Democrats Proud

His Big Government plan to protect U.S. jobs by stopping immigrants from coming and Americans from leaving

Plenty of Americans have no problem with the government taking harsh steps to stop immigrants from coming to thisFlag MotorcycleFabian Bimmer/REUTERS/Newscom country. But surely, even these restrictionists would consider it beyond the pale if Uncle Sam stopped Americans from leaving. That's what tyrannical regimes do—not free countries like ours ... right?

Wrong. In fact, America's emigration restrictions have grown in tandem with immigration restrictions under both Democratic and Republican rule. And President Trump is about to take things to a whole new level.

The core component of Trump's America First agenda involves slamming the door on immigrants—low skilled and high skilled, authorized and unauthorized—whom he blames for every economic ill from unemployment to stagnant wages to straining welfare. He's wrong about nearly all of this, incidentally. But for now, let's focus on the fact that his zero-sum economic logic against immigrants seeking entry to the United States also applies to Americans trying to leave.

Even before President Trump was elected, he threatened to impose a 35 percent tariff on every vehicle Ford manufactured in Mexico. And now he is fulminating against Harley-Davidson because the motorcycle manufacturer wants to move some of its operations overseas.

Trump dashed off a series of tweets practically accusing the company (which he had once hailed as the "iconic" American brand) of treason. "Harley Davidson should never be built in another country—never," he declared. "If they move, watch, it will be the beginning of the end—they surrendered, they quit! The Aura (sic) will be gone." Even more ominously he threatened that the company "will be taxed like never before."

Trump's wrath will only grow, because Harley-Davidson is far from the last company that will flee America if the president escalates his multi-front trade war. Harley-Davidson is moving because it wants to shield itself from the retaliatory tariffs that America's s European trading partners imposed on it in response to Trump's steel and aluminum tariffs on their companies. These tariffs added an estimated $2,200 to the price of every Harley sold in Europe, an annual hit of around $100 million.

To escape Europe's tariffs, the company decided to consolidate its manufacturing operations in Europe, where it intends to sell these motorcycles, rather than manufacturing them in America and then shipping them over. American automakers and electronics manufacturers are facing an identical dilemma and are likely to be the next domino to fall unless Trump realizes that his trade war is backfiring and backs off, argues Gary Hufbauer of the Peter Institute for International Economics.

Backing down is obviously not in Trump's nature. Secretary of Commerce Wilbur Ross affirmed as much when he stubbornly declared that the administration would stay on course on its belligerent trade policy despite a floundering stock market. So the more likely scenario is that Trump will, as he promised, try to make it prohibitively costly for these companies to flee. Precisely how he'll do so is unclear, but Cato Institute's Dan Ikenson notes that he could use his authority under Section 232 of the 1962 Trade Expansion Act and declare "outsourcing" a national security threat worthy of massive penalties. That sounds farfetched, but bear in mind that that's the authority Trump invoked to slap aluminum and steel tariffs on friendly nations just because they ran a trade deficit with America. "It's a scary thought," notes Ikenson, "but with Trump anything is possible."

Democrats might want to protest against the president ganging up on an iconic American motorcycle manufacturer — but they have no leg to stand on. They are very much a part of Trump's motorcycle gang.

Remember when Sen. Chuck Schumer (D-N.Y.) proposed the cutely titled Ex-PATRIOT Act in 2012 to go after Facebook cofounder Eduardo Saverin, who was allegedly trying to leave America to avoid paying capital gains taxes on his stock windfall? Channeling his inner Trump, the "infuriated" Schumer harrumphed: "We aren't going to let him get away with it so easily."

It's already not easy. Americans trying to quit America, apart from being current on all their tax liability, already have to pay a $2,350 passport-relinquishing fee, about 20 times more than the average for other high-income countries. Furthermore, anyone who has a net worth of $2 million or an average annual net income tax of $162,000 is assumed to be quitting for tax avoidance purposes. They are required to pay an exit tax that consists of capital gains taxes on the current market value of their assets regardless of whether these assets have been sold or not. And it is not just their U.S. assets that are taxed. America is one of the few countries that taxes the global income of green card holders, citizens, and companies. So everyone who quits America has to pay taxes on everything they own. (President Trump's tax reforms gave corporations a reprieve from this but, regrettably, not individuals.)

Schumer's Ex-PATRIOT Act mercifully failed, crushing the left, which was fervently supportive of this raw exercise of government muscle.

Let's also not forget the Obama-era crusade against corporate "inverters" like Walgreens and Medtronic that tried to merge with overseas companies to change their address—or domicile—and avoid taxes on their global income. In prose that would do Trump proud, outfits like Americans for Taxpayer Fairness dubbed these companies "deserters" and "traitors" and demanded that Congress close the "loopholes" that allowed them to leave. Barack Obama, as it happens, happily obliged by forcing companies that wanted to "invert" to reclassify their debt as taxable equity and pay taxes on it.

In the last few decades, Republicans have led the charge against immigrants (and Democrats have followed). But Democrats have led the charge against emigrants (and Republicans have followed).

Trump, in a grand synthesis, is simultaneously whipping up hysteria against both. This shouldn't be surprising. Why shouldn't a government that is ruthlessly stopping immigrants from coming to America in the name of protecting American jobs also not ruthlessly stop Americans from leaving for the same reason? The inner logic is frightening, but at least this president is applying it consistently.

This column originally appeared in The Week

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • SQRLSY One||

    "His Big Government plan to protect U.S. jobs by stopping immigrants from coming and Americans from leaving"

    His Glorious Walls work both ways, bitches!!!!

  • rocks||

    Please name one way in which Trump has made it harder for individual American's to leave the US. All of the discussion points in this article were policies that were in place prior to Trump. The title and premise here is complete BS.

    Reason and the comment section here is becoming worse than the democratic underground. SAD!

  • SQRLSY One||

    From the article:

    "And now he is fulminating against Harley-Davidson because the motorcycle manufacturer wants to move some of its operations overseas."

    We need to simply pay attention to what aspiring despots are saying, and take warning about what they do! Hitler gave PLENTY of warnings about his anti-semitism in his book and speeches, before he did his dirty deeds. By simply listening to, and watching, the DrumpfenFurher, we should KNOW what he wants to do! I just hope that we have not fallen into enough despotism by now, that The DrumpfenFurher will get away with all that he wants to do!

    Do they have to actually DO their despotic deeds, before we should speak up??!! NAZI history (and plenty of others) would advise that the answer is "Not just no, but HELL NO!!!"

  • rocks||

    Harley-Davidson is a company, not an American. You seem very confused.

    Again name one way in which Trump has made it harder for an individual American to leave the US. You can't because there is none. This article and comments are bull s**t.

  • SQRLSY One||

    OK so then what has the DrumpfenFurher done to ROLL BACK all of the penalties for individuals leaving the USA? He has not done a DAMN thing to roll back ANY of these penalties!

    "Harley-Davidson is a company, not an American."

    Tell that to the Harley-Davidson employees who are losing their jobs because of a trade war started by The DrumpfenFurher, and ask them after you tell them that, "There now, does THAT help you feel any better?"

  • rocks||

    So Harley-Davidson being encouraged to keep operations in the US is causing US employees based employees to lose their jobs? That is seriously your logic. You are a moron.

  • SQRLSY One||

    Trade wars are now defined as keeping operations in the USA? The DrumpfenFurher adding $3k to the costs for a European to buy a Harley-Davidson bike (made in the USA as compared to Europe) is encouraging Harley-Davidson to keep jobs in the USA? Like Government Almighty putting a gun to my head is "encouraging" me to "donate" money to the fed-guv? You have warped language to prop up your warped DrumpfenFurher-worshipping brain!

  • Joey JoJo Jr. Shabadoo||

    You didn't respond d to what he said. You're just deflecting.

    Why don't you just say "I hate Trumo because he's a big doo doo head", and leave it at that.

    That would at least be honest.

  • SQRLSY One||

    Steal a HUGE chunk of your assets on your way out? Which has already been taxed, as you gained your assets?

    NAZI Germany did the same thing to the Jews who were smart and rich enough to bail the hell out of there... And now our Government Almighty is stealing yet more "things you can do to fuck people over" from the NAZIs!!!"

  • Joey JoJo Jr. Shabadoo||

    It's been that way for decades. It isn't right, but it isn't Trump's fault that assholes passed that legislation long ago.

  • Jerryskids||

    American companies use our freedom to grow and prosper but when you ask them to pay their fair share for the infrastructure that supports their prosperity they want to "dine and dash" so to speak just to save a few bucks. It's not a matter of patriotism or nationalism to want these companies to stay here, it's simply an issue of their being a part of the community, an interconnected social structure that has supported them, that they owe a debt to. Companies like Harley Davidson didn't just create themselves out of nothing, they relied on the support of their workers and suppliers and customers to build a successful company and it's not just their decision to make to pull out, all of these other stakeholders should have a say. Or as our very good-brained President said, "You didn't build that."

    Oops, wrong President. But still, same idea. We're all socialists now.

  • JoeBlow123||

    You act like these big companies do not bribe politicians *cough* I meant lobby them to align the tax code with their interests and if that does not work, pay some of the smartest accountants in the world to funnel their money into indecipherable loopholes and schemes. Pretending their is not some issue with tax avoidance issues is silly especially considering these jackasses use the American taxpayer to bail them out if they collapse.

    Which is why it makes sense to make the tax code so simple it is impossible to cheat it, like just taxing consumption or expenses or something. If there is a way for smart or rich people to scheme they will do it, just have to make it next to impossible by making rules really simple. I really liked the tax code India was shifting into when I read about it before, I just do not know enough about it or how successful it has been.

    Also squishing some big companies would be nice too, no reason to have too big to fail.

  • Calidissident||

    Yeah Trump, the guy who is all in favor of giving special subsidies, tax breaks, and using eminent domain for Foxconn, is totally just against an unfair crony tax code.

  • loveconstitution1789||

    Foxconn tax break was Wisconsin and had nothing to do with Trump.

  • Mark22||

    You act like these big companies do not bribe politicians *cough* I meant lobby them to align the tax code with their interests and if that does not work, pay some of the smartest accountants in the world to funnel their money into indecipherable loopholes and schemes

    You say that as if it's a bad thing. Companies should be free to lobby politicians in their own interest and avoid all taxes they can legally avoid.

    It is the sole responsibility of politicians to say "no".

  • Joey JoJo Jr. Shabadoo||

    Correct. Amd our responsibility to 86 the ones who say yes.

  • RedRyder925||

    Harley Davidson did create themselves from nothing. Read about the history of Harley Davidson. It started with a couple brothers who invested everything they had. A true American success story. You speak as if you know the business side of things with Harley and how well the company is doing financially. Why would the shareholders have a say? They aren't in the accounting department at Harley. They have no idea how a tariff will affect the company, or whats best for the brand. Seems to me like you are just talking out of your ass. The truth is you have no idea how this will affect them besides what they are telling us. 2200 dollars a bike on average is insane and Harley is already the most expensive bike on the market. They can't compete. They simply won't sale.

  • loveconstitution1789||

    I get the brand loyalty but Harley ha been mismanaged for decades.

    IIRC they almost went bankrupt 2 times.

    Tariffs wont help but brand loyalty is the only thing saving that company.

  • Echospinner||

    They have no choice but to expand overseas markets which have stronger demand for motorcycles. The average Harley owner in the US is typically the over 50 guy who polishes it on Sundays then takes the occasional ride on a nice day. They have been losing US market share for some time.

  • loveconstitution1789||

    I tend to think you are correct.

    I see young adults on crotch-rockets not Harleys.

    This seems more media spin than anything. Of course tariffs add costs and hopefully the EU and China lower their trade restrictions soon.

  • Echospinner||

    You are not getting 8% returns by investing in hope. The market has been holding up fairly well this year but you see the volatility and uncertainty which the tariffs are only making worse.

    In the long run confidence and trust are the most essential assets both in business and in life. Those are not qualities Trump inspires.

  • loveconstitution1789||

    2017 was a 20% return in companies recovering from Obama.

    2018 is an up/down market to reset after rollbacks of government regulation and breaking the EU and Chinese trade restrictions that have been hurting goobal trade for decades.

    Sell high and buy low and ivest in companies that do just that.

  • Joey JoJo Jr. Shabadoo||

    Plus millennial s are not as big of motorcycle or automobile enthusiasts as older generations.

    These kids today are just pussies anymore. It was so much better when recreation as a teen was about partying, getting laid, and cool cars and bikes. Not texting and grizzle bazzle

  • lafe.long||

    IIRC they almost went bankrupt 2 times.

    Ah yes... the AMF-Harley shitshow (1969-81).

  • Mark22||

    Why would the shareholders have a say?

    Because they actually own the company.

  • $park¥ The Misanthrope||

    Trump is ruthlessly preventing immigrants from coming to America

    Ummmm, I'm not so sure that's right.

  • Citizen X||

    You're so unwoke.

  • Elias Fakaname||

    Don't know about him, but I am VERY woke. I didn't get much sleep at all last night, and could use a long nap.

    I could spend the whole morning not being woke.

  • sharmota4zeb||

    For the first time since we started recording in 1980, the USA resettled fewer refuges when the rest of the world combined. We only resettled 33,000 refuges in 2017, compared to 27,000 resettled in Canada, 15,000 resettled in Australia, 6,000 resettled in the UK, and 21,000 resettled in all other countries combined. That's a decline, but we still take in a large number of immigrants.

  • Conchfritters||

    I guess the President is calculating that he doesn't need Wisconsin the second time around.

  • loveconstitution1789||

    Harley davidson only accounts for a small work force. Foxconn is a much bigger employer in wisconsin.

  • Rhywun||

    floundering stock market

    Define "floundering".

  • General_Tso||

    'Floundering' is apparently the descriptive term for what happens when someone with an (R) is in charge.

  • Palin's Buttplug||

    The stock market is floundering in 2018 no doubt.

    The bull market of March 2009 to late 2017 has ended.

  • loveconstitution1789||

    My stock portfolio is at 8% this year.

    Obama really hurt the market and that was evident by massive gains after Obama left office and Trump took over. 2017 got me more in returns than every year Obama was in office.

  • Elias Fakaname||

    PB is so fucking full of shit. Just like a big, ugly stupid, shit filled piñata. And very beatable, like a piñata. Or even a plethora of piñatas.

  • $park¥ The Misanthrope||

    Trump dashed off a series of tweets practically accusing the company of treason.

    Oh for crying out loud.

  • perlchpr||

    I should think the company should return the favor, although it might backfire.

    "If you'd stop being a moron, Mr. President, we wouldn't *have* to move our factories."

  • Elias Fakaname||

    Nigga, please. HD has been planning this for awhile. Blaming Trump is just deflection.

  • loveconstitution1789||

    One huge benefit to Trump not really caring what his opponents say about him is that he helping Harley stay in business and take 100% of the grief for HD abandoning their American roots.

  • LynchPin1477||

    Most libertarian president in a generation!

  • loveconstitution1789||

    He did offer to end all trade restrictions if trading partners ended their trade restrictions. They declined.

  • Elias Fakaname||

    LC, you're supposed to conveniently forget/ignore that.

  • Echospinner||

    It is the oldest bargaining tactic in the world. While truly eliminating all trade barriers is something we can applaud, like world peace and military disarmament it ain't gonna happen in the foreseeable future.

    So you bring that nice sounding impossible goal up which puts pressure on the other side to make larger concessions while you keep upping demands. It is like invading other countries all in the name of global peace. Something which has gone on forever.

  • loveconstitution1789||

    I hope free trade does happen but it probably wont. Its certainly wont happen with China and the EU without pressure. Those socialist trading partners are notoriously protectionist.

  • Joey JoJo Jr. Shabadoo||

    Why is ending all trade restrictions 'impossible'? Could be easily phased in on a bilateral five year schedule to ease in the changes.

    You mean they just won't do it.

  • livelikearefugee||

    Many third world dictatorships have laws against expatriating capital.

    We're all third worlders now.

  • loveconstitution1789||

    Harley davidson went crying to the federal government twice to get tariffs against japanese motorcylce manufacturers.

    Fuck Harley-davidson. Its run by lefty crony capitalists now anyways.

  • Frank Thorn||

    I stopped reading at "Shikha Dalmia".

  • Elias Fakaname||

    Admittedly, I went straight to the comments. I'll read the article later, should I need to induce vomiting.

  • Diane Reynolds (Paul.)||

  • loveconstitution1789||

    Trump's wrath will only grow, because Harley-Davidson is far from the last company that will flee America if the president escalates his multi-front trade war. Harley-Davidson is moving because it wants to shield itself from the retaliatory tariffs that America's s European trading partners imposed on it in response to Trump's steel and aluminum tariffs on their companies.

    SO the USA had managed trade before Trump became President. Trump tells trading partners to end trade restrictions and the USA will end trade restrictions. The trading partners decline the offer. The EU implements even higher trade restrictions.

    This is all Trump's fault? Looks like its the EU's fault for raising their trade restrictions so Harley Davidson moves outside the USA.

  • blardo||

    Trump never had any intention of lowering trade barriers with other countries. The purpose of the tariffs is to reduce our trade deficit with these countries, and to prop up American businesses by shielding them from competition. Trump's protectionism is not a bargaining chip; it's an end in itself.

  • Mark22||

    Trump never had any intention of lowering trade barriers with other countries. The purpose of the tariffs is to reduce our trade deficit with these countries,

    That's a false dichotomy. Our trade deficit with these countries is a result of their trade restrictions..

  • Joey JoJo Jr. Shabadoo||

    Whoa......

    Blamdo can read minds! This is epic! Wait a minute.....

    NVM, he's just some ass clown projecting his feelings into an unprovable statement.

  • sharmota4zeb||

    Ummm ... yeah. When you try to prevent people from leaving your country, you've gone into Soviet style leadership.

  • rocks||

    And how is Trump "preventing people" from leaving the US?

    You asshats are insane, I look forward to voting for Trump, at least a few times, in 2020.

  • Mark22||

    Ummm ... yeah. When you try to prevent people from leaving your country, you've gone into Soviet style leadership.

    You mean like Congress has been doing for decades, with "exit taxes" and worldwide taxation? Yup, that is reminiscent of Soviet style leadership. But it didn't come from Trump.

  • Agammamon||

    I keep telling you guys that those who want to build walls always end up trying to point the guns inwards.

  • ||

    "Plenty of Americans have no problem with the government taking harsh steps to stop immigrants from coming to this
    country."

    I stopped there.

    I'd rather eat a bowl of cherry ice-cream.

  • Kha Tran||

  • Mark22||

    The core component of Trump's America First agenda involves slamming the door on immigrants—low skilled and high skilled, authorized and unauthorized

    If you want to successfully manipulate people, Shikha, you need to make your lies less transparent.

    Right now, you are just giving Reason a bad name.

  • LifeStrategies||

    "despite a floundering stock market"

    Really? Yet I understand the stock market is up substantially since President Trump won the election...

  • Klea Rusnim||

    Trump is NOT being tyrannical!! PEOPLE ARE FREE TO LEAVE!! Can we say FALSE EQUIVALENCY!!?? However - if a company WANTS TO MOVE THE MEANS OF IT'S PRODUCTION OUTSIDE THE US - which means LESS US JOBS - THEN YEAH - I say GO GET EM TRUMP!! Yet that DOES NOT MEAN they are NOT ALLOWED!! THEY STILL CAN!! Don't act as if Trump is FORCING them - THEY STILL HAVE THE FREEDOM TO CHOOSE YOU FOOLS!!!!

    NOT ONLY do I agree they should be taxed for moving their production out of the US - I ALSO SUPPORT A FULL BOYCOTT AGAINST THEIR COMPANY!!

    If the company is worried about the increased prices from the base components - THEN ALL THEY HAVE TO DO IS SIMPLY INCREASE THE PRICE OF THEIR PRODUCT!! SO LONG AS IT IS MADE IN THE US - THE PEOPLE WHO BUY THEIR PRODUCT (especially Harley of ALL fucking companies - WOW YOU HAVE DISAPPOINTED ME HARLEY) - THE PEOPLE WILL PAY FOR IT EVEN MORE SO KNOWING THEY ARE SUPPORTING A COMPANY WHO HAS CHOSEN TO STAY EVEN THOUGH IT FORCED THEM TO INCREASE THE PRICE ON THEIR PRODUCTS!!!

    I don't see INDIAN doing the same thing - why? BECAUSE THEY UNDERSTAND THE IMPORTANCE of THIS ISSUE!! The "trade war" excuse IS FULL OF DUMB - because, and again, if that were REALLY an issue - WE WOULD BE SEEING A TON OF COMPANIES - INCLUDING CAR COMPANIES - PULLING THE SAME THING- BUT they are not - BECAUSE of THAT ISN'T REALLY THAT MUCH OF AN ISSUE!!!!!

  • Klea Rusnim||

    Also Harley is exaggerating at the price increase - IT IS NOT going to be that much!! ALSO - EVEN IF IT WERE a 30% markup on their bikes - I WOULD STILL GLADLY PAY IT so long as they KEPT their products production WITHIN the US!! Watch people pay a higher price for bikes that are made IN the country. You don't think people (Trump supporters - who happen to be the majority consumer base of THIS product) won't boycott? ARE YOU KIDDING ME?!?! GOOD BYE HARLEY!!! LOL!!! SO LONG!!!

  • Joey JoJo Jr. Shabadoo||

    Harley's have been artifiacly expemsive for decades.

GET REASON MAGAZINE

Get Reason's print or digital edition before it’s posted online