If you’ve been watching the news lately, you’ve probably noticed that President Trump is giving a lot of attention to Harley-Davidson. The President has been using the company as an example of the unfair treatment our country receives on the international market. He wants to fix how the world treats American companies, but Harley might already be one step ahead of the effort.
How Is Harley-Davidson Beating a 100 Percent Tariff?
India is the largest motorcycle market in the world. The Society of Indian Automobile Manufacturers estimated that 16.5 million motorcycles and scooters were sold in India last year. That’s 50 times what was sold in the U.S. in that same time period. So, it makes a lot of sense for any American company to try to be a part of that huge market. Enter Harley-Davidson.
Harley controls about a 1 percent market share of India’s motorcycle sales. That means they sell almost 165,000 motorcycle in that country every year, but there’s a catch for any foreign sellers of motorcycles in India—a 100 percent tariff.
This tariff is actually the result of hard negotiations between the Indian government and non-Indian motorcycle sellers. India used to ban the import of all full-sized motorcycles until 2007 when the country decided to let foreign companies sell big bikes in their country. The 100 percent tariff was a part of that deal, and was probably meant to make buying domestic more appealing to buyers in India.
It's this tariff along with the 60 percent tariff on motorcycles in Thailand, 30 percent tariff in China, and the 23 percent tariff from Malaysia that has gotten the President’s attention. However, Harley has been finding work arounds for a long time.
In India, Harley-Davidson has a factory where they ship parts produced in Wisconsin to be assembled into full-sized bikes. Doing this actually exempts Harley from the 100 percent tariff, which means the company can charge normal prices in India.
This clever solution is just one of the many ways American companies get around harsh tariffs, but make no mistake, America does have its own tariffs to be reckoned with. What do you think our country should do to help make the world market more fair for motorcycle companies? Hit us up on Twitter and Facebook to let the attorneys who ride know what you think.