EU applies tariffs. General view of a Harley Davidson motorcycle, one of a number of US products set to be affected as European Union's retaliatory tariffs come into force today. Picture date: Friday June 22, 2018. The European Union is set to slap tariffs on 3.4 billion dollars (£2.5 billion) of American products, from whiskey and motorcycles to peanuts and cranberries after the US imposed tariffs on the bloc's steel and aluminium. See PA story EUROPE Tariffs. Dominic Lipinski/PA/AP
Harley-Davidson shifting some production from U.S.
06:22 - Source: CNN
CNN  — 

The global economy is a complicated thing, as President Donald Trump is learning in his tiff with Harley-Davidson.

He was feting Taiwan-based Foxconn on Thursday for setting up shop in Wisconsin, and at the same time hitting Wisconsin-based Harley-Davidson for pulling up some stakes and heading overseas.

The motorcycle manufacturer has drawn the President’s scorn for, as he put it, waving the “white flag” and choosing outsourcing some production to avoid tariffs Europe slapped on American goods as a countermeasure to the tariffs Trump enacted.

It’s just one of the dominoes to fall after his many tariff announcements on US trading partners he says have been eating America’s lunch. And Trump sounded like he could get punitive with Harley-Davidson, vaguely telling them to build their motorcycles stateside.

“Harley-Davidson, please build those beautiful motorcycles in the USA,” he said during the event at Foxconn’s new campus. “Don’t get cute with us, don’t get cute.”

Despite his wooing of Foxconn, Trump is at heart a nationalist and the “white flag” language is telling; in is mind, American companies are on one side in a trench at war with the rest of the world.

The company’s international plans predated Trump’s tariffs, but it cited the European barriers in a public filing with the SEC.

cnnmoney trump harley davidson white house
Trump blasts Harley-Davidson over production
02:01 - Source: CNN

Trump’s spat with Harley-Davidson will be interesting to watch, but it’s worth noting that the company’s difficulties share a lot of similarities that political watchers have been predicting will soon hamper the GOP. (For the record, Republicans control every piece of government in Washington and a majority of governor’s mansions, so they’re doing just fine.) But the long-term trends are notable.

Harley-Davidson’s problem is that its sales are going down. And tariffs will make selling the bikes built in the US more expensive in its second-largest market.

Why are sales down? That’s happening, according to analysts, because the people who identify with the brand are getting older.

Here’s how Nathaniel Meyersohn at CNN Money put it this week:

Harley faces demographic challenges in the United States. “Their core customer is an older, Caucasian male, and they’re exiting the sport,” said Joseph Altobello, an analyst who covers the company at Raymond James.

Sound familiar? Another American institution that has become extremely dependent on older white males is the Republican Party. In 2016, Trump won 62% of white men, according to exit polls. He more narrowly won white women with 52%. He won no other racial or ethnic group. He won every age group over 40. He lost every age group under 40.

Millennials will soon eclipse Baby Boomers as the largest voting bloc. They’re more racially diverse than the earlier generation. CNN’s Ron Brownstein has written about this extensively. And the proof is evident in Trump’s 2016 win. Democrats continued to make inroads with minorities and in urban areas. Trump spoke to blue-collar voters who felt left behind and pulled the Rust Belt, including Harley-Davidson’s Wisconsin home.

The difference now is that Harley-Davidson is addressing its falling sales by seeking out new markets overseas in that global economy. Republicans under Trump seem to be doing the opposite, pursuing policies that add barriers to American goods – instituting tariffs and removing the US from international trade deals. Trump says his tariffs will force countries, individually, to the negotiating table for a new generation of bipartisan trade agreements instead of the group deals (like the Trans-Pacific Partnership he scuttled) pursued by recent presidents.

And while Harley-Davidson is trying to diversify its base with sales in Asia and – in particular, Europe – the Republican Party is going in the opposite direction. With Trump’s provocative policies aimed at immigrants and refugees, which face little Republican opposition, as well as Trump’s language saying there were some fine people among white nationalist protesters last year or his loaded language about minorities, particularly Latinos, the party isn’t exactly trying to expand its base to the growing segments of the population.

This is all oversimplifying complicated subjects, but it’s no mistake that Trump appeared several months ago with Wisconsin’s Harley-loving governor and some bikes at the White House. Those were happier, pre-tariff times, when Harley seemed like it was in the trench with him.