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Flashback: Donald Trump Comments on Harley-Davidson’s Struggles in the Indian Market due to Trade Tariffs

Flashback: Donald Trump Comments on Harley-Davidson’s Struggles in the Indian Market due to Trade Tariffs
  • Donald Trump has issued a warning regarding reciprocal tariffs, which would result in the US imposing the same tariff rates as those levied by other countries on American exports.

Flashback: Donald Trump Comments on Harley-Davidson’s Struggles in the Indian Market due to Trade Tariffs
Harley-Davidson currently partners with Hero MotoCorp in India, with the X 440 being their first collaboratively designed model.

US President Donald Trump has advocated for reciprocal tariffs on countries, corresponding to the rates at which they impose tariffs on American goods. During discussions with Prime Minister Narendra Modi, Trump criticized India’s high tariffs on US-manufactured Harley-Davidson motorcycles.

Also Read: Discover Harley-Davidson bikes in India

In his second term, Trump has reiterated the notion of reciprocal tariffs, asserting that this aligns with his vision of equitable trade practices. He previously imposed a 25% tariff on specific imports from Canada and Mexico, though that initiative was temporarily paused until the end of February. He has also targeted regions like the European Union, China, and India. “Currently, we are a reciprocal nation… Whatever tariffs India charges us, we will reciprocate, and I believe this is only fair,” he stated. “I recall when Harley Davidson struggled to sell their motorcycles in India due to steep taxes and tariffs, which led them to establish local manufacturing to circumvent these costs. Others might consider similar strategies in their dealings with us.”

While both India and the US maintain significant trade relations, Trump’s tariff threats do not single out any specific country. By promoting domestic production and leveraging his presidential campaign on the promise of creating more American jobs, Trump signals his desire for production capacities to develop or increase in the United States rather than relying heavily on imports.

What happened to Harley-Davidson in India?

Harley-Davidson entered India in 2009, launching its first dealership in 2010. Known as a premium brand in the US, Harley initially imported models such as Sportster, Dyna, VRSC, Softail, and CVO. However, as the years went by, the company began to locally assemble certain models, including the Street 500 and 750 in Bawal, Haryana.

Despite the vast two-wheeler market in India, penetrating the premium segment posed significant challenges. In September 2020, Harley-Davidson announced its exit, citing weak demand and disappointing sales figures. However, it wasn’t a complete exit; the American company partnered with Hero MotoCorp in October 2020, designing a framework for Hero to enable sales and servicing of Harley’s motorcycles. By 2023, their first joint project, the Harley-Davidson X440, launched at a price of ₹2.30 lakh (ex-showroom).

Stay informed about Upcoming Cars In India, Electric Vehicles, Upcoming Bikes in India, and the exciting technologies reshaping the automotive industry.

First Published Date: 14 Feb 2025, 12:50 PM IST

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Trump Criticizes US Trading Partners as ‘Worse than Our Enemies,’ Announces ‘Reciprocal Tariffs’

Trump Criticizes US Trading Partners as ‘Worse than Our Enemies,’ Announces ‘Reciprocal Tariffs’
Trump Criticizes US Trading Partners as ‘Worse than Our Enemies,’ Announces ‘Reciprocal Tariffs’

Just hours before his meeting with Prime Minister Narendra Modi, US President Donald Trump announced his strategy for broad “reciprocal tariffs” that will impact both allies and adversaries, heightening global trade tensions that experts warn could result in domestic inflation.
“To ensure fairness, I’ve decided to impose a reciprocal tariff,” Trump stated in the Oval Office. “It’s fair for everyone. No other nation can argue against it.”

In his Oval Office address, Trump reaffirmed his stance, saying that American allies often act “worse than our enemies” regarding trade issues.

The president also remarked that India imposes “enormous” tariffs, which hindered Harley Davidson’s ability to sell motorcycles in that country. “India is traditionally at the forefront when it comes to tariffs. There are a few smaller nations that charge more, but India’s tariffs are significant. I recall that Harley Davidson was unable to sell motorcycles in India due to excessively high taxes and tariffs, which forced them to establish a factory there to circumvent paying those tariffs. This approach is something others can pursue with us as well. They can set up plants or factories here, which applies to industries like healthcare, automotive, and semiconductor manufacturing,” Trump explained.
The tariffs will be specifically tailored for each trading partner, considering non-tariff factors such as value-added tax (VAT).
This announcement came just before Trump’s planned meeting with PM Modi in Washington. Analysts believe that developing markets like India and Thailand, which impose higher effective tariffs on US goods, could be significantly impacted, while countries with existing trade agreements may experience less disruption.
Peter Navarro, the president’s trade advisor, openly criticized the European Union’s VAT practices, remarking that “Major exporting nations around the globe undermine our markets with severe tariffs and even harsher non-tariff barriers.”
The United States will initially focus on those economies experiencing the largest trade deficits or exhibiting “most egregious issues,” as indicated by a White House representative.
The unnamed official suggested that the implementation of these tariffs could take “a few months, but not much longer than that.”
Trump acknowledged the likelihood of price hikes due to these tariffs but remained hopeful about future market stabilization.
Since taking office, Trump has enacted multiple tariffs targeting key trading partners, contending these actions rectify unfair practices and can drive policy changes.
The president perceives tariffs as means of generating revenue, resolving trade imbalances, and leveraging diplomacy.
The White House representative highlighted unfair trade practices and the absence of reciprocity as contributing factors to America’s ongoing trade deficit.
The memorandum he signed instructs the US Trade Representative, Secretary of Commerce, and other officials to suggest country-specific remedies.

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Trump Announces 25% Tariffs on Steel and Aluminum Imports, Warns of Additional Measures Ahead

Trump Announces 25% Tariffs on Steel and Aluminum Imports, Warns of Additional Measures Ahead

New York, Feb 10, 2025, IANS


Trump Announces 25% Tariffs on Steel and Aluminum Imports, Warns of Additional Measures Ahead
On February 10, US President Donald Trump announced plans to impose a 25% tariff on all steel and aluminum imports, reigniting a long-running trade dispute with India. Speaking while en route to New Orleans for the Super Bowl, Trump stated that he would unveil the tariffs on Monday, which would affect imports from all nations. He emphasized, “Any steel coming into the United States is going to have a 25 percent tariff, aluminum, too.” Trump also mentioned that reciprocal tariffs would be instituted for all countries, saying, “Very simply, if they charge us, we charge them.”
The tariffs are expected to be announced within the next few days and take immediate effect. This development arrives just before Prime Minister Narendra Modi’s upcoming visit to Washington. In 2023, India exported steel valued at $4 billion and aluminum worth $1.1 billion to the US. The trade of these metals has been fraught with tension, with the US accusing India of subsidizing its exports.
During PM Modi’s previous visit to the US in 2023, the two nations agreed to resolve six disputes regarding these metals at the World Trade Organization. Nonetheless, in October, the US imposed duties of up to 39.5% on certain aluminum imports. It remains unclear how Trump’s announced 25% tariff will intersect with these existing duties.
In the final days of former President Joe Biden’s tenure in January, the US agreed to lift some additional tariffs set by Trump’s initial administration, which ranged from 10% to 25%, while establishing a monitoring mechanism for exports. In exchange, India consented to lower tariffs on apples, walnuts, and almonds. According to the US Census Bureau, India’s total exports to the US reached $87.4 billion, while imports amounted to $47.8 billion last year, resulting in a significant trade surplus for India.
Trump has been focused on reducing the US trade deficit and plans to do so through tariffs. During his initial term, he highlighted the 100% duty on Harley Davidson motorcycles as a reason for labeling India a “Tariff King.” This month, India symbolically lowered tariffs on various heavier Harley Davidson models from 50% to 30% and from 50% to 40% for other models. However, in key areas such as satellite ground equipment and specific categories of scrap and waste, India has eliminated certain duties while cutting others.

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India Reduces Import Tariffs on U.S. Motorcycles and Cars, Benefiting Harley and Tesla

India Reduces Import Tariffs on U.S. Motorcycles and Cars, Benefiting Harley and Tesla


India Reduces Import Tariffs on U.S. Motorcycles and Cars, Benefiting Harley and Tesla
US President Donald Trump embraces Indian Prime Minister Narendra Modi during the “Namaste Trump” event at Sardar Patel Gujarat Stadium in Ahmedabad, India, on February 24, 2020. — Reuters

NEW DELHI: In its Union Budget for 2025-26, India has substantially reduced customs duties on premium motorcycles, cars, and smartphone components. This development appears advantageous for American companies such as Harley-Davidson, Tesla, and Apple, following remarks by US President Donald Trump describing New Delhi as a “tremendous tariff maker.”

Nonetheless, Finance Minister Nirmala Sitharaman stated that the adjustment of customs duties is aimed at promoting self-reliance within the Indian economy and is not a reaction to Trump’s tariff announcements.

“We are focusing on our own economy and aiming to fortify the foundations of the Indian economy to transform it into a manufacturing hub,” she asserted.

During her budget presentation on Saturday, Ms. Sitharaman disclosed a reduction in import duties for high-end motorcycles, with engine capacities up to 1,600cc imported as completely built-up (CBU) units, from 50 per cent to 40 per cent.

According to the Union Budget for 2025-26, the import duty on semi-knocked down (SKD) kits has decreased to 20 per cent from 25 per cent. Furthermore, completely knocked down (CKD) units will now incur a tax of 10 per cent, down from 15 per cent.

This shift is set to enhance the import of quintessentially American Harley-Davidson motorcycles into India, as the previous high tariffs have been a longstanding issue between India and the US.

Harley-Davidson began its journey in India in 2010, following the “mangoes for motorcycles” agreement established between India and the US in 2007. However, the American motorcycle manufacturer withdrew from the Indian market about ten years later, in September 2020, as part of broader downsizing efforts.

Nonetheless, a month later, Harley-Davidson re-entered the Indian market after Hero MotoCorp Ltd formed a non-equity partnership with the American brand to manufacture and distribute its motorcycles in India. Currently, Hero MotoCorp produces and sells the Harley-Davidson 440X, the smallest model in the brand’s lineup.

During his first term in office, Trump raised concerns regarding the 50 per cent import duty on Harley Davidson motorcycles, deeming it “unacceptable.”

Separately, Ms. Sitharaman announced that the tariff on luxury cars, including station wagons and racecars valued over $40,000, has been reduced from 125 per cent to 70 per cent. Additionally, the basic customs duties on lithium-ion batteries used in electric vehicles in India have been eliminated.

Most of the aforementioned EV manufacturers are already operational in India, developing vehicles tailored for the Indian market. However, this move could serve as a lure for American companies like Tesla, which is keenly observing the expanding Indian EV landscape.

In April 2024, Tesla CEO Elon Musk planned a visit to India to meet PM Modi, fueling speculation about potential investments in the country. However, he canceled the trip due to “very heavy Tesla obligations.”

In the 2025-26 budget, Ms. Sitharaman confirmed that customs duties on 28 items related to mobile phone battery production from countries such as the US and China have been waived. This initiative aims to lower the cost of mobile phones and accessories in India while bolstering local production, particularly as India progresses towards becoming the world’s second-largest mobile phone manufacturer.

Apple stands to gain significantly from these reductions in import taxes. A report from Reuters indicates that Apple secured a 23 per cent share of total revenue in 2024.

As US President Trump advocates for prioritizing domestic industry under his “America First” trade policy, India’s recent adjustments to import taxes are perceived as a strong signal to the American administration, seeking assurance against increased taxes or additional trade barriers directed at Indian goods.

Previously, Trump asserted that India imposes the highest tariffs on foreign items compared to major economies and threatened to enforce reciprocal tariffs on Indian products. He also warned of 100% tariffs on BRICS nations, including India, if they moved away from the US dollar.

Speculation arises that with the tax reductions on imports, India aims to capitalize on the US-China trade conflict and augment its own presence in global supply chains. Trump’s tariffs are becoming disruptive to global trade, creating uncertainty in the market. With the import tax reductions, India should be better positioned to navigate a potentially unpredictable year, as reported by Reuters.

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India Takes Steps to Protect Itself from Potential Trump Tariffs

India Takes Steps to Protect Itself from Potential Trump Tariffs

 

New Delhi: India has initiated an extensive analysis by sector, developing multiple scenarios to brace for a potential increase in tariffs on goods exported to the United States during the Donald Trump administration, according to various sources familiar with the situation. “Different ministries and departments are evaluating a range of scenarios in anticipation of such a move by the US and exploring possible countermeasures,” one source stated.Also Read: Trump’s stark warning to India risks significant consequences

President-elect Trump stated on Tuesday that the US would introduce reciprocal tariffs on Indian products due to the high tariffs imposed by New Delhi on American goods. Experts suggest that India might need to reassess its import duties on specific items and could offer increased market access for certain American imports to alleviate Trump’s concerns.

Previously, the US has raised concerns regarding the high import duties on Harley Davidson motorcycles, as well as limited access for medical devices, equipment, and dairy products in India.

Addressing US Concerns

Officials assert that India’s most favoured nation (MFN)-weighted average import tariff is relatively low, approximately 5-6%. While select agricultural products encounter higher tariffs, even those are significantly lower than the rates outlined by the World Trade Organization (WTO). They note that most countries, including the US, apply elevated tariffs and various non-tariff barriers on agricultural goods. For instance, dairy products, fruits and vegetables, cereals, food preparations, and oils in the US face tariffs as steep as 130-190%.

One insider mentioned that any thorough evaluation of the impact or necessary measures can only occur after the Trump administration officially takes over on January 20.

Experts suggest that New Delhi has the option to impose retaliatory tariffs or approach the WTO while advocating for a strategic response.

“It makes sense to reconsider certain products for tariff adjustments to address US concerns,” remarked one expert who preferred to remain anonymous due to the sensitive nature of the issue. While tariffs are bound by WTO commitments or linked to MFN status rather than being country-specific, there is an opinion that a measured approach could be taken when evaluating the product list traded between India and the US.

India Takes Steps to Protect Itself from Potential Trump Tariffs“It is unfeasible for India to implement country-specific tariffs, as that would violate the most-favoured nation (MFN) principle,” stated Ajay Sahai, director general of the Federation of Indian Export Organisations (FIEO).

Tariff Review

Sahai believes that India can revisit certain tariff lines and strategize accordingly, even if it results in a slight duty loss on some products.

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Harley-Davidson Struggles with Proposed Tariffs from Trump

Harley-Davidson Struggles with Proposed Tariffs from Trump

Here’s a brief overview of how tariffs operate in economics.

When a company imports a good or its component from a foreign country, let’s imagine it costs $20 prior to any tariffs. The company markets that item for $30 to consumers, achieving a modest profit.

However, if the country where the company is located imposes a 50% tariff on imports from the supplier country, the cost of that good rises to $30. To maintain profitability, the company is then compelled to charge consumers $40, thus transferring the added expense onto them.

The primary intention behind tariffs is not to penalize the exporting country but to encourage domestic production, prompting companies to source locally to avoid tariff costs. Nevertheless, if local alternatives are either unavailable or similarly priced, the burden of extra costs still falls on consumers, rather than the country from which the product was imported.

Moreover, tariffs can lead to adverse effects on global commerce, instigating countries to retaliate. For instance, if the U.S. imposes tariffs on imported goods, the UK may respond by imposing tariffs on American products, including notable brands like Harley-Davidson.

Harley-Davidson Struggles with Proposed Tariffs from Trump

As reported by Politico, this is not the first instance of the U.K. imposing tariffs on American products. The last time this occurred was during Trump’s presidency concerning American steel. “The U.K. has retaliatory tariffs on iconic U.S. goods including Harley Davidson motorbikes ready to be immediately deployed in case of a trade war with Donald Trump,” the publication notes, adding, “The British government has been strategizing how to counter potential Trump tariffs on U.K. goods, with officials briefing ministers that they can reinstate former EU measures against the U.S. without further inquiry. Following Brexit, the U.K. maintained tariffs that the EU had imposed on U.S. products as a response to Trump’s steel tariffs.”

This situation arises at a particularly difficult time in Harley-Davidson’s prolonged history. With domestic demand plummeting, the company has been intensifying efforts to penetrate European and Asian markets, with the U.K. emerging as a key market. They’ve worked diligently to engage potential customers in the area and have even sought to attract MotoGP fans through its dynamic King of the Baggers series, though it’s uncertain if these efforts will succeed.

However, all these initiatives could be rendered ineffective if Harley-Davidson bikes, already among the priciest motorcycles on the market, increase in price by 10% to 30% because of retaliatory tariffs from the UK and possibly from the EU. Picture a $30,000 motorcycle suddenly escalating to $50,000 due to these newly enforced tariffs, a situation that could unfold almost overnight.

Harley-Davidson Struggles with Proposed Tariffs from Trump Photo by: Harley-Davidson

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“Current and former government officials told Politico that the U.K. can swiftly reintroduce these tariffs on the U.S. if Trump acts on his threats to impose 10 to 20 percent tariffs on all imports, without facing opposition from Britain’s trade regulators,” the article notes, adding, “This can proceed without the typical need for an investigation by the independent Trade Remedies Authority, as these tariffs were suspended indefinitely by the British government in 2022 rather than being fully removed.”

If you’re skeptical, Harley experienced the negative consequences of tariffs during Trump’s last presidency as well. And this issue extends beyond just the U.K. and the EU; if Asian nations decide to impose their own counter-tariffs on American goods, particularly Harley-Davidson products, the impact could be detrimental.

With plummeting demand, an aging customer base, and a lineup that seems targeted at Baby Boomers—who are no longer purchasing motorcycles at the same rates—Harley is teetering on the brink of failure. Its best strategy for attaining long-term financial health lies in penetrating markets where small-displacement bikes are prevalent. But if even their desirable small-displacement 350 and 440 motorcycles become 10% to 30% more expensive, the company may lose its competitive edge against manufacturers like CFMoto, Bajaj, QJ Motors, and other reasonably priced domestic brands.

When you factor in additional macroeconomic challenges currently affecting the entire industry—such as high interest rates, stagnant wages, increasing inventory, economic instability, and lower-than-expected demand—Harley-Davidson finds itself in a precarious position, facing a multitude of challenges.

In summary, if these tariffs take effect and other nations retaliate—which they almost certainly will—Harley-Davidson may be facing serious trouble.

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UK May Counter Trump’s Actions with Tariffs

UK May Counter Trump’s Actions with Tariffs

The UK has prepared retaliatory tariffs on iconic US products, including Harley Davidson motorcycles, for immediate implementation in the event of a trade war with Donald Trump.

The British government is devising strategies to counteract any potential Trump tariffs on UK exports. Officials have advised ministers that they can quickly adapt former EU measures against the US without requiring additional investigations, Caliber.Az reports via foreign media.

After Brexit, the UK retained tariffs from the European Union that had been imposed on US products during Trump’s first term, as a response to his extensive tariffs on European steel. Last month, it was reported that the EU also has a similar set of measures prepared for activation.

The UK tariffs were maintained after Britain officially exited the EU in February 2020, affecting iconic American goods like Jack Daniel’s bourbon, Levi’s jeans, and Harley Davidsons.

UK May Counter Trump’s Actions with Tariffs

Current and former government officials have indicated that the UK could swiftly reinstate these tariffs on the US if Trump follows through on his threats to impose 10 to 20 percent tariffs on all foreign imports, without encountering opposition from Britain’s trade regulator. Publicly, the UK government prefers to avoid discussions about a potential retaliatory trade war with the US, despite Trump’s tariffs on British imports.

Reintroducing tariffs on motorcycles and other goods could heighten tensions between the two nations and breach the agreement made between the UK and the Biden administration to suspend such measures initially. Within the government, ministers are optimistic while also preparing for adverse outcomes.

A Cabinet minister, speaking anonymously to express their views, remarked, “US tariffs are potentially very significant for us,” further stating, “Trade constitutes only about 10 percent of their GDP, but it’s around 30 percent for the UK.” They emphasized that the UK’s primary objective is to convince the president-elect not to impose tariffs on British imports from the outset.

The Cabinet minister also suggested that should Trump take action, the UK government would prefer to negotiate a deal rather than resorting to retaliatory measures, as was done previously.

By Naila Huseynova