Guest Column: Ronald Reagan was king of tariffs
Establishment GOP leaders swoon over Ronald Reagan, while at the same time they denounce tariffs. They forget that Ronald Reagan was the most pro-tariff US president we’ve had in decades.
In 1983, Harley Davidson was on the brink of collapse. Honda had used more reliable aluminum engines for nearly twenty years and Harley Davidson still hadn’t upgraded from cast iron.
Reagan issued a five year tariff for larger imported motorcycles from 4.4% to 49.4%. This practically eliminated Harley Davidson’s competition. Japanese motorcycle companies had to fall back on producing more bikes with small engines. Harley Davidson was given free reign over the market for larger-sized engines for five years.
If Reagan had taken the libertarian approach, he would have told Harley Davidson it was their own fault and they should just suck it. Huge amounts of American manufacturing jobs in Wisconsin would have been lost.
In 1984, Harley Davidson finally introduced an aluminum engine called the Evolution. Despite a rough first year, the bugs were fixed and it heralded a new prosperous era for Harley Davidson. The engines easily lasted well over 50% longer than previous cast iron Harley engines. By 1986, all new Harley Davidson had aluminium engines.
Honda has continued to be a motorcycle innovator. Leading the field with innovations like liquid cooled engines and dual pin flywheel. Today Harley has models with Honda style engines, while still using 1980s style engines on most models to maintain the looks and exhaust note of classic Harley Davidsons.
While the Evolution engine is widely called “the engine that saved Harley Davidson,” Ronald Reagan’s massive tariff deserves probably over half the credit. If the tariff hadn’t been imposed when it was, Harley Davidson probably would have been bankrupt before the Evolution was even perfected. Reagan’s five year motorcycle import tariff was long enough for Harley Davidson to rebuild it’s US market share.
Today, our GOP “elites” tell us how terrible tariff’s are. They don’t even want tariffs against China, a country that manipulates their currency against the US dollar and imposes tariffs against US products.
Free trade is false rally cry, because China does not practice free trade with America. If you want to sell in China, you have pretty much have to manufacture your product in China.
Below: Ronald Reagan talks about Harley Davidson in 1987.