Harley hogs Trump’s attention on import tax

Washington: US President Donald Trump has once again said the tax imposed by India on Harley-Davidson motorcycles as an example of “unfair” trade practice that the United States must fight back with “reciprocal taxes”. America doesn’t have a levy on Indian motorcycle imports. Trump held Indian tariff on Harley-Davidson as prohibitively high that severely disadvantaged it against the competition. 

He first mentioned it in his inaugural address to a joint sitting of US Congress in February 2017 a few weeks after taking office. But he had not named India then. Talking to US lawmakers about trade at the White House, the President said, “We pay a tremendous tax to get into their countries — motorcycles, Harley Davidson — it goes into a certain country. 

I won’t mention the fact that it happens to be India, in this case.”  Trump went on to talk about a certain “great gentleman” -- he did not name or describe him -- who had called him and said, in the President’s retelling of the phone call, “We have just reduced the tariff on motorcycles, reduced it down to 50% — 5-0 — from 75, and even 100%’.” New Delhi has cut customs duty on high-end imported motorcycles to 50%.

Trump said while Harley-Davidson paid the tax, Indian bike importers paid nothing. “And yet they (Indian companies) sell thousands and thousands of motorcycles, which a lot of people don’t know, from India into the United States. You know what our tax is? Nothing.”

Harley-Davidson India has an annual sale of 3,700, according to reports, but Trump’s claims that Indian motorcycles sell by the “thousands and thousands” in the US was called an “exaggeration perhaps” by India-US trade watchers. The US is not among major importers of Indian bikes.

India did indeed have a 100% tariff on motorcycles larger than 800cc but the rates have since dropped to 75% and 50% for certain categories of big bikes. There is 0% duty on large Indian bikes coming into the United States and that for Trump is a case of “unfair” trade.