In November 2005 Tom Barrett, mayor of Milwaukee, sent a letter to President Bush saying that big orders of made-in-America luxury motorbikes would help to address the current U.S.-China trade imbalance while protecting the jobs of workers at Harley-Davidson's plants in Milwaukee, Kansas City, and York, Pennsylvania. The U.S. trade deficit with China widened to a record $162 billion in 2004, a 31 percent increase since 2003 and the largest bilateral trade deficit between any two nations in history. Economists widely view the trade gap as an indication of the decline in the competitiveness of U.S. manufacturing industries.

Few dispute that the Chinese, with an economy growing at 9 percent a year, are eager to buy Harleys. Harley's inability to crack through China's tangle of motorcycle license restrictions and urban rider bans has prevented Harley from opening a single dealership in the world's most populous nation. China is one of only a few international markets that stymies Harley, which exports to more than 60 nations and outsells its Japanese rivals on their own turf. Mainland China effectively bans motorcycles in its 170 biggest cities. It is in these cities where the most likely purchasers of American-made motorcycles live. Harley argues that this amounts to a de facto trade barrier.

Source: Adapted from John Schmid, "Milwaukee Mayor Makes Harley-Davidson a Test Case for Trade with China," Knight Ridder Tribune Business News, November 10, 2005, p. 1.