President of the United States of America, Donald Trump has once again spoken about his disappointment over high import duty tax that automakers pay to sell their products in the Indian sub-continent. Trump cited the example of motorcycle manufacturer Harley-Davidson which pays high import duty on its Completely Built Unit (CBU) motorcycles and said its an unfair trade practice followed by India. He also said that America must fight back with 'Reciprocate Tax' as currently, America does not levy tax on Made-In-India motorcycles sold in USA.
This is the second time Donald Trump has expressed his concerns over high-import duty charged by other countries. The first time was soon after he took over as the President but had not specified India's name. Speaking at the White House while addressing U.S lawmakers, Donald Trump said, We have so many countries where we made a product, they make a product, they pay a tremendous — 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." and ended this with a laughter.
He then further said, "a great gentleman called me from India and he said, we have just reduced the tariff on motorcycles, reduced it down to 50 percent from 75, and even 100 percent." without naming that person. Donald Trump emphasized again that a company like Harley has to pay 50 to 75 percent tax to sell its motorcycle in India. He further claimed that it also sells thousands and thousands of motorcycles, from India into the United States. Donald Trump added, "You know what our tax is? Nothing."
While its true that India charged 100% tax on premium motorcycles having more than 800cc engine capacity but the import duty has gone down 50% for certain categories of Completely Built Units sold in India. Donald Trump considers no import duty on large Indian bikes sold in the United States as an “unfair” trade practice.
Donald Trump's claim of thousands of thousands of made-in-India motorcycle being sold in America is not true. India's top two-wheeler exporter, Bajaj Auto does not even export to America nor does TVS. Royal Enfield recently started its export to America but the number of units exported to North America is certainly not as much as the Presidents claim. In India, American motorcycle manufacturer, Harley-Davidson India has sold less than 3000 units in India this financial year. America is clearly is not among the top importers of two-wheelers made in India and also Indian two-wheeler manufacturers do not consider America as their major export market.
Donald Trump then threatened without blaming India by saying, "I say we should have reciprocal taxes for a case like that. I’m not blaming India. I think it’s great that they can get away with it. I don’t know why people allowed them to get away with it. But there’s an example that’s very unfair. And I think we should have a reciprocal tax."
Donald Trump believes that countries like China and India have surplus trade with America and have a wider margin for profits which might be true but India has recently slashed import duty on premium motorcycles and Donald Trump's exaggeration has once again got his facts wrong.