President Donald Trump has criticised India for imposing high import duty on the iconic Harley-Davidson motorcycles and threatened to increase the import tariff on “thousands and thousands” of Indian motorcycles to the US.
During a discussion with members of the Congress on the steel industry, Trump said the recent decision of the Indian government to reduce the tariff from 75 per cent to 50 per cent was not enough and asked that it should be reciprocal, as the US imposes “zero tax” on the import of motorcycles.
“We have so many countries where we made a product, they make a product, ..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,” Trump said amidst laughter from the audience.
Trump also indirectly referred to the recent conversation he had with Prime Minister Narendra Modi in this regard.
“And a great gentleman called me from India and he said, we have just reduced the tariff on motorcycles, reduced it down to 50 per cent from 75, and even 100 per cent,” Trump said in an apparent reference to his last week’s conversation with Prime Minister Modi.
“We have — if you are Harley Davidson, you have 50 to 75 per cent tax, tariff to get your motorcycle, your product in. And yet they sell thousands and thousands of motorcycles, which a lot of people don’t know, from India into the United States. You know what our tax is? Nothing,” he told the lawmakers and his other Cabinet colleague.
Trump once again pitched for a “reciprocal tax” on countries that he says “abuse” their trade relationships with the US.
Trump once again pitched for a “reciprocal tax” on countries that he says abuse their trade relationships with the US.
“So, 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. I think we should have a reciprocal tax,” he said.
Trump has floated the idea of a reciprocal tax in the past, promising to slap it on countries, including allies, that take advantage of the United States.
“That’s called fair trade. It’s called free trade. Because ultimately, what’s going to happen — either we’ll collect the same that they’re collecting, or, probably, what happens is they’ll end up not charging a tax and we won’t have a tax. And that becomes free trade,” Trump said.
Imported motorcycles from high-end brands such as Harley-Davidson and Triumph are set to get cheaper in India with the reduction in the tariffs.
Earlier, import of motorcycles with engine capacity of 800cc or less used to attract 60 per cent duty, while those with the capacity of above 800cc, attracted 75 per cent duty.
The Central Board of Excise and Customs (CBEC), through a notification on 12 February, has slashed the duty on both these variants of motorcycles imported as completely built units (CBU) to 50 per cent.
Indian industry experts said the import duty rates have been rationalised for these motorcycles as it has been an industry demand for long and such high-end bikes are not manufactured in India currently.