Donald Trump Mimics PM Modi While Criticising India’s High-Import Duty On US Made Harley Davidson Bikes: Decoding Substance Behind His Jibe
This is not the first time that Trump has brought up the topic of high duties imposed in India on the import of Harley Davidson bikes. The US President has also called for ‘reciprocal trade policies’ in the past.
Washington, Feb 27: U.S. President Donald Trump has done it again. He mimicked India’s Prime Minister Narendra Modi, reportedly not the first time, while describing the two’s recent conversation on India’s decision to lower import-duties on American manufactured bikes like Harley Davidson. He got soft-spoken and clasped his hands in front of his chest and said, “We are lowering it to 50 percent.” I said, “Okay, but so far we’re getting nothing.” So we get nothing, he gets 50[%], and they think — like they’re doing us a favor…He is a beautiful man and he said I just want to inform you that we have reduced it (import duties) to 75% and we have further reduced it to 50%. And I further said, huh, what do I say? Am I supposed to be thrilled?"
Trump made these remarks at the 2018 White House Business Session with Governors. The U.S. President picked off the names of the countries one by one that he feels are short-changing the U.S. He also heaped scorn upon the U.S’s neighbours Mexico, Canada as well as those farther away i.e. India and China.
Trump's speech at White House Business Session with Governors
Donald Trump also said, “India sells us a lot of motorbikes…So when they have a motorbike — a big number, by the way — they have a company that does a lot of business. So they have a motorcycle or a motorbike that comes into our country — the number is zero. We get zero.”
This is not the first time that Trump has brought up the topic of high duties imposed in India on the import of Harley Davidson bikes. Trump has also called for ‘reciprocal trade policies’ in the past.
However, with Trump’s statements one has to take the facts with a pinch of salt because he chooses to highlight only those facts that support his arguments. Trump’s claims that Harley Davidson bikes are hit with extraordinary high duties are true but these duties apply only to completely built units (CBU). The volumes of premium motorcycles, comprising around 80% of total premium motorcycle sales, come either from motorcycles which are locally assembled from completely knocked down (CKD) kits, or are imported after being manufactured in countries like Thailand. India has a free trade agreement (FTA) with Thailand under which duties are comparable to CKD duties.
Most of the 4,500 Harley Davidsons sold in India each year are actually assembled in India, which means the buyer can avoid the pricey tariffs. Harley-Davidson's largest selling Street 750 and Street Rod models are made in India and the rest of the Softail range are assembled in India. Only the Touring range models, and the CVO Limited, with prices ranging above ₹ 30 lakh, are full imports.
Moving onto Trump’s other claim of India exporting “a lot of motorbikes” to the U.S. is largely untrue. The U.S. is not a market for Indian motorcycle manufacturers. Manufacturers like Bajaj Auto, TVS Motor Corp and Hero Motor Corp are focused on other emerging, mass market economies in Africa, Latin America and South East Asia.
According to Cartoq, India’s niche motorcycle brand Royal Enfield has a marginal presence in the U.S. with the sale of a few hundred units annually. The other made in India motorcycles sold in the U.S. are the KTM 390 Duke and RC 390 bikes, but these are not exported directly from India. In fact, the KTM bikes are first exported to Austria, and then further exported to the U.S., so technically sales of KTM bikes in the U.S. do not fall under the direct purview of KTM India, according to a report earlier this month.
Trump’s repeated attacks on India’s high tariffs come at a time when the NDA government has taken a protectionist stance and increased import duties across a range of products while the U.S. has a $30 billion trade deficit with India.
Earlier this month, the Indian government in a bid to boost its Make In India policy had increased import duties of products from 49 product groups including cellphones, perfumes and makeup, and automotive segment.
(The above story first appeared on LatestLY on Feb 27, 2018 12:42 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).