Trump, Trade, Royal Enfield and Harley-Davidson

John Burns
by John Burns

The POTUS is angry about unbalanced trade around the world, and his latest target is India via Harley-Davidson.

“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,” Trump said, saying the United States should impose a “reciprocal tax” on other countries in return.

In a story in this morning’s Washington Post, “Trump accused India of selling `thousands of thousands of motorcycles, which a lot of people don’t know, from India into the United States. You know what our tax is? Nothing.’

“Problem is, the number of motorcycles imported from India into the United States is minimal. India’s Royal Enfield brand has dealerships in the United States and sells about 1,000 of its high-end bikes a year, according to Cartoq, but “motorcycles” don’t even merit a mention in the Indian Ministry of Commerce and Industry’s most recent data on exports to the United States.”

The rest of the WaPo story is here, but the gist is that trade relations with India seem to be headed in a confrontational direction. Will this be bad timing for Royal Enfield, which just introduced its first new motorcycles in decades – affordable ones Americans might actually want to buy in serious numbers? Stay tuned for more…

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  • DHZ DHZ on Mar 06, 2018

    While India motorcycles coming to the USA, may be only 1,000, its the lack of traffic that is going the other way that is ticking USA manufacturers off. India buys in less than one week the number of motorcycles and scooters that the USA buys in a year. The import tax was 104%. After Trump complained, it went down to 50%. But if you export into India, you do not get the subsidies per bike that the Indian government is paying the Indian company (or any American one that will set up there) nor do you get the subsidies paid to the consumer to buy your bikes. So you are in the face of the lopsided taxes, forced to open at least an assembly plant if you want to play in the big market. So the USA bike company that I work for, ZEV Electric, is forced into opening an assembly plant to ship in kit bikes (taxed as parts at 25%) and assemble them in Pune, India We would much rather not, and prefer to ship nice fully assembled bikes from West Virginia, but twice the price for the same bike is a hard sell and you are nearly locked out of the market. Every country wants this deal. Everyone is jacking up their taxes and trying to force every supplier in the world to have a separate plant for each country. But at the same time, every country like India wants to export the bikes you designed built there to everywhere else, and try to stop you from selling in other country if they were not through India. It's hell for the manufacturer requiring far more staff to try to maintain qualify and assembly standards and even cope with the details of shipping, multiple certification standards, etc. You cannot just make up profitability from volume.

  • Prasad Prasad on Feb 01, 2019

    Royal Enfield is a very big brand in India.