Harley-Davidson Move Shows Dangers of Trump Trade War

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Writing in The Hill, Professor Kyle Handley argues that current policies could result in long-term economic damage.

 

Boxing gloves with flags of U.S.A. and European Union

Harley-Davidson recently announced it would move its motorcycle production overseas to avoid new tariffs resulting from President Donald Trump’s trade policy. In a new op-ed article in The Hill, Michigan Ross Professor Kyle Handley describes the move as a predictable and avoidable result of Trump’s confrontational approach.

Kyle Handley

“The move by Harley is a case study in the downside risk of Trump’s trade policies. The steel and aluminum tariffs have gotten the U.S. into a trade war with some of its largest trading partners. On a parallel track, Trump is renegotiating the North American Free Trade Agreement (NAFTA) with little success, has threatened to leave the World Trade Organization (WTO), and has alienated the Group of Seven and other economic allies,” Handley writes.

“If there is a strategy here, it appears to be that the U.S. is large enough to use trade restrictions to cajole other countries into doing what it wants. But U.S. import tariffs hurt U.S. firms and consumers too, even if they might help a few concentrated sectors.”

Handley concludes that Trump’s actions damage long-established international cooperation in ways that could last well past his presidency.

Kyle Handley is an assistant professor of business economics and public policy at the University of Michigan Ross School of Business.

Read the full op-ed

Read related Kyle Handley research paper

Media contact: MichiganRossPR@umich.edu