Industry

Donald Trump pressuring India to slash duty on Harley-Davidson bikes

US President Donald Trump reportedly steps in to pressure India into lowering import tariffs on large engine motorcycles, namely Harley-Davidson models

Harley-Davidson could receive a much-desired boost in the vast Indian market following the state visit of US President Donald Trump, during which he raised gripes about the country’s high import taxes.

Trump has been vocal about his displeasure at the high taxes slapped on CBU (completely built up) imports of motorcycles – namely Harley-Davidson machines – which at one time stood at 100%, though this was reduced to 50% when Trump called Indian PM Narendra Modi to raise a grievance.

However, with Modi rolling out the red carpet to Trump as he makes his first visit to the Asian nation, discussions have reportedly taken place to make more changes.

For now, the Indian officials have reportedly opted to reduce import tariffs on Harley-Davidson models with an engine size of more than 1600cc. Though the move is a sweeping change that will benefit other manufacturers – such as Triumph and Indian Motorcycles - it is seemingly intended to benefit Harley-Davidson primarily due to its relative dominance in terms of models in this sector.

Ironically, as the Indian government reduced CBU tariffs, it actually raised the CKD (Completely Knocked Down) tariff from 10% to 15%. This format of production accounts for far more of Harley-Davidson’s sales in India.

The Milwaukee-based company became an unwitting pawn in Trump’s high-profile tariff war which saw him raise import taxes on a number of Asian and European-manufactured products, prompting other nations to follow suit on American brands in retaliation.

With the vast majority of Harley-Davidson’s manufacturing done in the US, prices of its motorcycles multiplied overnight and forced the company to speed up plans to build plants in other countries, much to Trump’s chagrin.

Indeed, despite Trump’s attempts to promote American manufacturing first and foremost at home, the message hasn’t been getting through to customers with Harley-Davidson’s domestic sales having declined by almost 25% over the last seven years.

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