Jesus, 100 percent? Was President Donald Trump kidding about Harley-Davidson and a 100 percent tariff in India in his speech last night? You might be asking this. The answer: no.
Shortly after Trump delivered his first speech to a joint-session of Congress last night, Quartz published a story that highlights India’s 100% tariff applied to motorcycles with large engines. Coming away from the story, you might think it’s totally unfair.
But then, the US can be just as brutal with its own tariffs on imported goods.
Sour cream with more than 6% butterfat costs 87.6¢ per kilo at the border if the country it’s from doesn’t qualify for special treatment. That amounted to a 114% global tariff in 2015, according to US Census Bureau figures. The levy on condensed milk is 49.6¢ per kilo, which worked out to a 103% tariff in 2015.
Notably, the US’s tariff on large motorcycles from India is 0% and can range up to 10% for other countries. (Meanwhile, if you’re importing Indian flue-cured tobacco that has been threshed but won’t be used in cigarettes, the US will charge you 37.5¢ per kilo at the border. That amounted to a 77.9% tariff in 2015.)
But as the Milwaukee Journal-Sentinel notes, Harley seems to be doing just fine in India.
In India, where big touring motorcycles and cars are saddled with a 100% import tariff, Harley’s sales have grown by a brisk 30% in the past two years. That’s largely because the company has been able to get around the tariff by assembling bikes In India, something it’s done in that country since 2011.
And as CNNMoney reports that parts for some of the bikes are produced in Wisconsin and then shipped to India for the assembly to be finished.
India is a major market for motorcycles. There were 16.5 million motorcycles and motor scooters sold there last year, according to the Society of Indian Automobile Manufacturers. That’s more than 50 times as many motorcycles than were sold in the U.S. last year, and represents 80% of all vehicle sales in India. While Harley-Davidson sells the majority motorcycles in the U.S., it has less than 1% market share in India.
Harley broke a record for sales in the Asia-Pacific region last year, according to CNNMoney. Translation: The 100 percent tariff sounds drastic, but there’s far more to it than meets the eye.