PLEASANT HILL, OCTOBER 6, 2018 – Today I received from U.S. Congressman Emanuel Cleaver a newsletter entitled “The Effects of Tariffs.” It makes me wonder who wrote this for him; since Congressman Cleaver has always been against open borders and open trade. Don’t believe me? It is simple; look at his voting record since entering office.
For the sake of fairness, here is his Newsletter:
Much is going on right now on Capitol Hill but there are still some critical issues that are on the minds of many hard-working people that have been buried under the headlines. One of those critical issues continues to be the effects of tariffs on the U.S. economy. Hundreds of thousands of jobs may be in jeopardy because of these tariffs. Congress must act to protect American workers, provide stability in place of the administration’s volatility and push to end this trade war as soon as possible.
In the last few months, I have visited with farmers, business leaders and organizations in my district. I’ve heard from large manufacturers and leaders of smaller companies and they have expressed their frustrations on how tariffs are affecting their bottom line. The products vary…ranging from aluminum to soybeans to beef…but all of those I’ve spoken with share one common fear, the fate of their businesses under these tariffs.
For example, Harley Davidson, a company I fought hard to bring to Kansas City, suddenly announced they were closing the plant and moving overseas. That left nearly a thousand workers unemployed overnight. Now, just imagine that multiplied around the country.
Agriculture is one of Missouri’s top industries, bringing in about $88 billion per year. Most farmers tell me that the recently announced USDA payments are a start, but that ultimately they want trade, not aid.
What I learned is that these tariffs are hurting these businesses in ways we haven’t even thought of and Congress needs to take action to protect American jobs.
How do I pick this up and put some truth to it?
Lets start with Harley Davidson. Outright mal-intentioned misinformation. No other phrase for it.
In an article just before Harley Davidson released the fourth quarter earnings, an analyst is quoted as saying “The world’s largest manufacturer of heavyweight bikes saw a 40% drop in its third-quarter 2017 profit, to $68.2 million from $114.1 million in the same period a year earlier.” He then backs up his comment by pointing out the demographic shift faced by Harley Davidson “…manufacturers are caught between two customer demographic trends: millennials who aren’t widely embracing the motorcycling lifestyle, and baby boomers who are aging out of riding.” This article was published on January 16, 2018.
On January 30, 2018 news headlines from Kansas City to Milwaukee, and down to Chicago shouted that Harley Davidson was closing down plants, consolidating into York PA and cutting some 350 to 400 jobs nationwide.
From the Chicago Tribune, on January 31, 2018, comes the following Quotes:
“The story is, or continues to be, that Harley is in the throes of a significant secular decline,” he wrote.
Sales in the crucial U.S. market fell 11 percent in the fourth quarter and 8.5 percent for the year. Harley executives said they’re drawing more consumers to their brand, but couldn’t say during the call with analysts how many are buying used instead of new bikes.
“Harley can’t get younger people into the hobby and the bikes are too big to be transportation in Europe or Asia,” Kevin Tynan, a Bloomberg Intelligence analyst, said in an email. “That future is really dark.”
On February 17th the Milwaukee Journal Sentinel published a story from which the following quote comes [emphasis added]:
“Ultimately, this initiative is about reducing excess (plant) capacity. Our Kansas City workforce has done a tremendous job producing quality motorcycles and serving our customers. And we have always appreciated the support of our Kansas City community,” Pflughoeft said in an email to the Journal Sentinel.
I don’t see one word about Tariffs: Do you?
My next question is: When did the Thailand plant come into the picture? Let’s go to Reuters for an answer that will make a lot of sense:
The Thailand facility “will allow us to be more responsive and competitive in the ASEAN region and China,” Harley-Davidson public relations manager Katie Whitmore said.
“Increased access and affordability for our customers in the region is key to growth for the company in total,” she said. “There is no intent to reduce H-D U.S. manufacturing due to this expansion.”
The plant would let Milwaukee-based Harley-Davidson avoid Thailand’s up to 60 percent tariff on imported motorcycles and help it get tax breaks when exporting to Thailand’s neighbors, thanks to a trade arrangement among members of the Association of Southeast Asian Nation (ASEAN).
It seems that Harley Davidson made a sound business decision to move to Thailand. The US Market is down. The Boomers are getting too old to ride into the sunset, and the millennials don’t care for the freedom motorcycles bring – something about safety in four wheels, or something like that.
Sagging sales in the US, too expensive for Asia with a 60% tariff, so they moved the plant to Asia so they don’t “import” they “build” product there.
Mr. Cleaver, a question Sir: Why is Harley Davidson leaving? Tariffs is correct, but not those imposed by Donald Trump, it is because Asia, has punitive tariffs for imports.
Are you doing something about the tariffs in China? No!
Are you doing something about the tariffs in Asia in general? No!
Those are bad questions for you Sir, so let me try some business-related questions.
Do you know how to run an international business? No! In fact, Sir, you’ve had difficulty running a local business. No shame in that; I have failed twice myself, so I understand that running a business is a complex challenge.
Now, you may be speaking of the Aluminum and Steel Tariffs that Trump put on the world who protects their steel industry but wants access to our markets for free. When did the Aluminum and Steel tariffs go into effect?
Headline, New York Times, March 31, 2018: White House to Impose Metal Tariffs on E.U., Canada and Mexico.
Timeline:
- H-D opens plant in Thailand – March 24, 2017
- H-D Restructure of US Plants – January 30, 2018
- US Announces Tariffs on Aluminum and Steel – March 31, 2018
This is all known to Congressman Cleaver. He has staff to look this up. This is not an accident of forgetting timelines. This is a serious attempt to misinform his own constituents of the facts.
Trump said Mexico and Canada had better negotiators in the past, than the US. He wanted the playing field leveled. He renegotiated NAFTA into the US, Mexico, Canada Trade deal reducing significant entry barriers for our products into Mexico and Canada. Trade war? Yes. Focused, Effective and Short Lived: Yes!
Trump said Europe had better negotiators in the past, and that they were good enough to take advantage of the US. The EU balked and did not like it. They threatened a trade war with the US. They went home and thought better of it. The response was, in the end, why don’t we do away with tariffs on both sides of the Atlantic? Not done yet; but it is working.
Trump said China was manipulating its currency, and imposing entry barriers like tariffs and other practices (ownership percentage, etc.,) that make it difficult for the US. Early tariffs were reciprocated, and on September 24th the 10% tariff went into effect. Ouch! In January, the new 25% tariffs will go into effect. They will make importing more expensive.
What will American firms do? If its too expensive to buy from China, where will we buy? Will we make it in the US? Perhaps. We leveled the playing field somewhat. We can’t get into China, but China can’t reduce its costs enough to beat our internal prices. Yes, it will be painful; but if the tariffs remain, Mexico is cheaper, Canada may be cheaper, and certainly the US Manufacturing boom and lowest unemployment rate since 1969 will be tested as more manufacturing jobs return, our economy booms, and the world is actually a freer place.
No, I believer Mr. Cleaver is misinforming us all, but then we don’t believe everything we read, we do our own research and we make the decision on the ballot box in November.
It is truly time to retire Mr. Cleaver and to elect Jacob Turk to the U.S. House of Representatives for Missouri’s 5th Congressional District.
We need people in Congress that will tell the truth, not tell self-serving, political-wind-driven, stories that they think you can’t see through.
Respectfully Submitted
Lee’s Summit Conservative
