From US News:
Bikers vs. steelers
Turns out globalization makes trade wars more, not less, nasty
By Joshua Kurlantzick
Over the past 20 years, motorcycle manufacturer Harley-Davidson has survived a brush with bankruptcy yet retained intensely loyal customers, many of whom tattoo the company name on their arms. But now Harley could become a casualty of the nastiest trade war in a decade, a battle made bloodier by the very global integration that trade advocates celebrate.
The confrontation was triggered by President Bush's announcement last month of tariffs of up to 30 percent on foreign steel. Whatever the merits of the move, the politics seemed clear: Big U.S. steel manufacturers employ fewer than one third the workers they did in the 1960s but are concentrated in political swing states like Pennsylvania, notes Andrew Szamosszegi, a steel expert at consulting firm LECG. And Bush's show of sensitivity to their concerns could help persuade trade-wary senators to support "fast track" legislation, making it easier for the president to negotiate trade deals, a vote on which is expected this week.
Settling the dispute may not be easy. As trade negotiators have become closer over the past decade, they have also learned more about using one another's political systems to inflict retaliatory punishment. Europe has threatened tariffs against a diverse list of U.S. products–including Harleys, corsets, orange juice, and, bizarrely, yak hair–produced in states crucial to GOP congressional hopes. Affected U.S. producers, plus steel importers, already are complaining.
Expansion of the global trading system also has complicated battle lines. Disputes could once be handled in backroom deals among Europe, America, and Japan; now more countries have a say, argues Robert Scott of the Economic Policy Institute. Last month, China, now the world's largest steel producer, challenged the U.S. steel tariffs at the World Trade Organization, a move supported by several developing countries. Yet some analysts think Bush made a wise decision. "America's large steel mills have made huge efficiency gains," says Robert Blecker, a trade specialist at American University. "There will be a global shakeout in the steel industry. When that happens, do we want the cupboard bare of large U.S. steel producers?"
Ultimately, most trade experts believe that the free-market-oriented president will back down. And if not? "We haven't taken official action yet, but we've started talking to unions of Harley owners, our 'hog armies,' " says Joe Hice, a Harley spokesman. Coming soon to the White House: legions of leather-clad bikers.
Bikers vs. steelers
Turns out globalization makes trade wars more, not less, nasty
By Joshua Kurlantzick
Over the past 20 years, motorcycle manufacturer Harley-Davidson has survived a brush with bankruptcy yet retained intensely loyal customers, many of whom tattoo the company name on their arms. But now Harley could become a casualty of the nastiest trade war in a decade, a battle made bloodier by the very global integration that trade advocates celebrate.
The confrontation was triggered by President Bush's announcement last month of tariffs of up to 30 percent on foreign steel. Whatever the merits of the move, the politics seemed clear: Big U.S. steel manufacturers employ fewer than one third the workers they did in the 1960s but are concentrated in political swing states like Pennsylvania, notes Andrew Szamosszegi, a steel expert at consulting firm LECG. And Bush's show of sensitivity to their concerns could help persuade trade-wary senators to support "fast track" legislation, making it easier for the president to negotiate trade deals, a vote on which is expected this week.
Settling the dispute may not be easy. As trade negotiators have become closer over the past decade, they have also learned more about using one another's political systems to inflict retaliatory punishment. Europe has threatened tariffs against a diverse list of U.S. products–including Harleys, corsets, orange juice, and, bizarrely, yak hair–produced in states crucial to GOP congressional hopes. Affected U.S. producers, plus steel importers, already are complaining.
Expansion of the global trading system also has complicated battle lines. Disputes could once be handled in backroom deals among Europe, America, and Japan; now more countries have a say, argues Robert Scott of the Economic Policy Institute. Last month, China, now the world's largest steel producer, challenged the U.S. steel tariffs at the World Trade Organization, a move supported by several developing countries. Yet some analysts think Bush made a wise decision. "America's large steel mills have made huge efficiency gains," says Robert Blecker, a trade specialist at American University. "There will be a global shakeout in the steel industry. When that happens, do we want the cupboard bare of large U.S. steel producers?"
Ultimately, most trade experts believe that the free-market-oriented president will back down. And if not? "We haven't taken official action yet, but we've started talking to unions of Harley owners, our 'hog armies,' " says Joe Hice, a Harley spokesman. Coming soon to the White House: legions of leather-clad bikers.
