Remember When Reagan Imposed a Tenfold Increase On Tariffs For Japanese Motorcycle Imports?

NY TimesIn an unusually strong protectionist action, President Reagan today ordered a tenfold increase in tariffs for imported heavyweight motorcycles.

The impact of Mr. Reagan’s action, which followed the unanimous recommendation of his trade advisers, is effectively limited to Japanese manufacturers, which dominate every sector of the American motorcycle market.

The only comparable trade action by this Administration, the President’s decision last May to impose quotas on sugar imports for the first time since 1974, was aimed at an entire industry.

But it brought angry reaction today from Japanese officials and a threat to file unfair-trade charges against the United States in Geneva.

”We consider it unfortunate that the American side decided to take this kind of drastic measure,” said Hiroshi Ota, counselor for public affairs at the Japanese Embassy here. He added that Japan was considering taking a formal protest of the action to the General Agreement on Tariffs and Trade.



17 Comments on Remember When Reagan Imposed a Tenfold Increase On Tariffs For Japanese Motorcycle Imports?

  1. What I remember was the claim the Japs were ‘dumping’ their bikes below cost to get the market to themselves. Turned out Honda, Yamaha and Susuki were fighting among themselves to be the only Jap bike in US. Meanwhile HD fumbled a few more years before getting things right.

  2. Another example more in line with Trump’s target China would be Obama’s attempt to target China for dumping tires in America at cheap prices.

    The tariffs did ultimately lead to a 30% reduction in Made in China tire imports from 2009 to 2011, but that didn’t mean 30% more tires were produced in the U.S. It just meant that 30% more tires were imported from Canada; 110% more from South Korea; 44% more from Japan; 152% more from Indonesia; 154% more from Thailand; 117% more from Mexico and 285% more from low volume provider Taiwan, according to the U.S. International Trade Commission.

    The measure was meant to whack imports of passenger and light-truck tires and give a boost to manufacturers and job creation in the U.S. But a close look at the government numbers shows there has been no big boost at all.

    Based on research this tariff led to higher prices for the motorcycles involved and only limited or no impact on jobs.

    What is interesting in this talk of tariffs and especially in this example involving Reagan is how it involved the very Crony Capitalism that we as conservatives are supposed to be against. In this case the Reagan tariff was initiated by a petition from Harley Davidson for protection against foreign competitors. Likewise it was also HD that requested its removal later as it was in their best interests as a business.

    Based on Trumps own history using political access, it seems fitting that this is how tariffs were used and may be used again to the benefit of those who are closest to those in power; Cronies.

  3. ” Harley-Davidson, which had dominated the industry in the earlier postwar period, now makes only larger, more expensive motorcycles (over 1,000 cubic centimeters displacement).
    But in earlier testimony to the I.T.C., the company said it hopes to reenter the market for machines of 750 cubic centimeters and thus needs protection there.”

    Interestingly enough, Harley Davidson finally introduced both a 500cc and 750cc version of their motorcycles…
    …Both of which are manufactured in Asian countries…

  4. And Harley-Davidson enjoyed the protection the tariffs gave them and did ZERO in the meantime to up their quality, yet they DID raise THEIR prices.
    Harley-Davidson is what almost sunk Harley-Davidson.

  5. What you all don’t realize is this occurred right after the families of the original Harley and Davidson purchased the company back from AMF (a corporate raider…..just like Romney’s company). Willie G. Davidson turned the company around fairly quickly, and produced quality motorcycles that people wanted. For over a decade there was around a one year waiting period for their large displacement bikes. They couldn’t produce them fast enough. They introduced innovative marketing ideas, like entry level 900cc bikes that sold like hotcakes, and provided a full purchase price buy-back program for anyone who wanted to upgrade to a larger model. They were one of the first to introduce fuel injection (even before cars), and belt drive. They also had “customize your bike at the factory” options that let you select engines, frames, suspensions, colors, and accessories to be assembled at the factory for you.
    I was at their York, PA factory in 1997 and saw their state of the art facility. It was quite impressive. Each bike was custom built at the final assembly line, with custom components delivered “just-in-time” via conveyor to match the customers specific order.
    My brother bought a “wide glide” back in 1984. It had excellent fit and finish, and was very reliable.

  6. An important fact that just happens to not fit the narrative here.
    What Reagan did was match the tariff that japan had placed on large American made motorcycles.
    It’s too bad that he didn’t match the tariff that Japan put on American cars.
    Japan blocked us first, and we responded.

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