Last Tuesday evening, in a speech to Congress, Harley-Davidson was singled out by President Donald Trump as example of an American company having difficulties to sell abroad because of high tariff and taxes reaching 100%.
President Trump didn’t mention any country, but the example he was talking about is India imposing a 100% tariff on all imported motorcycles with engines larger than 600 cc. Other notable countries with high tariffs on large motorcycles (see chart) are Thailand, China, and Malaysia.
President Trump called for free, but fair, trade. It’s true that the United States doesn’t impose tariffs on importing other countries’ motorcycles. But if the US doesn’t tax imported motorcycles, it taxes many other products. For example, imposes tariffs on imported 103% on milk, 77.9% on tobacco, 24% on of clothing made of synthetic fibers, etc) As a matter of fact, Census figures show that the US collected $1.1 billion in tariffs on $46 billion of goods imported from India in 2015, for an average rate of 2.4%. India collected $2.1 billion of tariff on $21.5 billion of imported US goods, an average of 9.64% according to the International Trade Centre.
In addition, it’s not true that Harley-Davidson pays a 100% tariff to Indian: since 2011 the company doesn’t import full motorcycles because it has a plant in this country where motorcycles are assembled not only for Indian but also the Asian market. Last January, in comments submitted to the Office of the United States Trade Representative, a lobbyist for Harley even warned that imposing additional tariffs on foreign imports could end up hurting sales. The issue of trade barriers through tariffs is extremely complex because the purpose of protecting a country is often due to differences between countries regarding for example pollution or safety matters.