Six months ago, Harley Davidson was one the president’s favourite companies. It’s now the latest victim of his wrath. Harley-Davidson has announced that it will be moving some of its production overseas on June 25. This iconic American motorcycle brand claimed it was doing so to avoid any retaliatory tariffs that the European Union imposed in response to U.S. import tax.
Trump tweet, A Harley-Davidson should not built in another nation never! Watch out for them moving. It will be the beginning the end. Things were different back in February. During a meeting with White House executives, Trump praised Harley Davidson as an American icon, one the greats and thanked them for building things in America.
Trump’s fury at Harley’s announcement as an international relations expert whose focus is on trade disputes is understandable. Trump wants Harley-Davidson to be promote for his America First agenda. This approach aims to create and protect American manufacturing jobs. Trump is not likely to please with Harley’s decision to export its EU-bound bikes. This got me thinking. In a world where global supply chains are a constant, what makes a product made in America? Is Harley a truly all-American bike? Who cares?
What Does Made In America Mean?
It’s not as easy as you might think for consumers trying to determine if a product was made in the United States. American corn and soybeans are easy to identify. They are grown in the U.S.A by American farmers in states such as North Dakota and Iowa. Only inputs are seeds and fertilizer. All of these can be easily found in the U.S.
The meaning of American-made clothing becomes less clear. The fabric and thread could have been spun in Bangladesh with American-grown cotton, even if it made in New York or Los Angeles. A 40-page Federal Trade Commission document explains exactly what qualifies an item as Made in USA. Only automobiles, textiles and fur, as well as wool, must declare their U.S. content at point of sale. Other products can use the tag, provided they adhere to the guidelines.
Domestic Or Foreign Harley
Let’s have a closer look at cars. Since 1993, parts of American-made cars and motorcycles have been moving across North American borders. American automakers like Ford and Chevrolet rely on parts from Mexico, the EU, and often assemble their vehicles in Canada.
Congress passed the American Automotive Labeling Act in 1994. It require automakers to disclose the percentage of parts that made in the U.S., Canada, and the origin country of the engine and transmission. It was design to encourage patriotic consumption base on the assumption that Americans will buy more products if they know it made in America.
Professor Frank DuBois of American University describes some of the data as misleading. It doesn’t show how much of the parts made in the U.S. or Canada. To track this data and other information, he created the 2016 Kogod Made in America Auto Index. This index provides a better indicator of how much a car is helping the U.S. economy. His findings show the fine line between domestic and foreign.
Toyota, a Japanese carmaker, assembled its 2017 Camry in America with an American engine and transmission. The U.S. and Canada accounted for three-quarters of the parts, which gives it a 78.5 percent total domestic content. Honda, a Tokyo-based company, built its Accord in America with an American engine and a Japanese transmission. It also used 80 percent U.S. parts or Canadian parts. This score gives it an 81%.
General Motors ChevyVolt has a 63 percent domestic content, and half of its parts made in Canada or outside the U.S., despite its American engine. Even lower the Ford Fusion, It features a U.K.-built motor, and only 25% of its parts made in the U.S.