In the 1980's, President Ronald Reagan slapped a 50% tariff on Japanese motorcycle imports, sheltering Harley-Davidson from competition for five years so they could become more productive and efficient. Before the five years were up, Harley was exporting to Japan.

Today's free trade economists claim that trade promotes growth, but as shown in the case of Harley-Davidson, growth promotes trade. As American businesses are sheltered from unfair import competition, they become more productive and efficient, and can offer their exports at a lower cost to better compete with goods in foreign markets. If the response to the unfair imports of Japanese motorcycles in the 1980's were left to idealistic free traders, Harley would likely be a historical footnote and America's trade deficit would be even larger than it is now.

The Harley-Davidson of today is not only wildly popular in the United States, but there is also a huge following in Europe. As Euroland ponders which American exports to use as examples of retaliation for President Bush's 30% tariffs to protect the U.S. steel industry, European citizens are lobbying hard to keep Harley-Davidson off the list.

The moral of the story is that if Reagan had listened to the free-trade zealots and "let the market do it's magic," Harley-Davidson would have been the feature in a disappearing act. But they prospered instead and became an engine of export growth for America, creating literally thousands of jobs.

The American parts industry got a boost from the import tariffs as well. 95% of the parts content in Harley-Davidson motorcycles is obtained from domestic sources. In the automobile industry, only the Ford Taurus has a domestic parts-content that high.

Today, Harley-Davidson stands strong and tall, symbolizing both American patriotism and the American spirit in the belief that there is enormous pride in owning a motorcycle that continues to be made only in America by an American-owned company.

31