Harley and Indian face Trump taxes threat

Harley-Davidson Road King V Indian Springfield price pressures taxes

Harley-Davidson and Indian Motorcycle might face higher taxes if they move production offshore in the escalating trade wars, President Trump has threatened. 

It seems Harley has become a political football for Trump who once lauded the company as an American icon and exemplary manufacturer.

Taxes Tweet

However, in an unprecedented threat, Trump has now Tweeted: “If they move, watch, it will be the beginning of the end — they surrendered, they quit! The Aura will be gone and they will be taxed like never before!”

He might soon also have to threaten Indian Motorcycle which is now considering moving production to Polaris facilities in Poland to avoid the repercussions of Trump’s trade war with Europe.

Company spokesman Jess Rogers says they are considering “the possibility of moving production of Indian Motorcycles destined for Europe from Iowa to our facility in Poland”.

Parent company Polaris also has manufacturing facilities in Mexico and has been considering an assembly plant for Indian motorcycles in India.

“The growing impact of this trade war is increasing the production costs of our vehicles,” Jess says.

“We continue to examine various options for managing the cost increases from both tariffs and the domestic materials pricing.”

Trade war chronology 

Harley-Davidson execs meet President Trump taxes
Harley-Davidson execs meet President Trump shortly after his inauguration

The talk of trade wars began early last year when Trump mentioned “unfair tariffs” of 100% against Harley in India.

Fake news!

The fact is, only a few Harleys imported into Indian copped a 75% tariff (now 50%), while partially assembled Harleys and Street models built in India had much lower tariffs.

Then Trump slapped a 25% tariff on steel and aluminium, which placed cost pressures on Harley and others who Trump was trying to protect.

The tariff further backfired on Harley when Europe slapped a 31% retaliatory tax on Harley, Indian Motorcycle and other American products.

Harley claimed this would increase the average cost of bikes imported into Europe by $US2200 ($A3000, €1800), so they announced they would increase prices in the northern Autumn.

But Harley then decided to absorb the costs until they could move more production offshore to its Indian, Thai and Brazil factories.

This move outraged Trump who sent a series of nasty Tweets about Harley  “waving the white flag” and surrendering to soon.

It seems he wants Harley and other companies to suffer while he beats his chest on the world stage.

4 Comments

  1. Honda moved a lot of their production to Thailand before Trump even became president, perhaps he’ll be blamed for that too, why not.
    Cost of steel/aluminium makes almost no difference to vehicle price, it’s the manufacturing & distribution costs – value adding.

    If Trump says something bad about motorcycles by all means get stuck into him, but he hasn’t, in fact he’s the only world leader who’s promoted motorcycling in a positive light. Don’t get sucked into the politics, if any world leader is a friend of motorcycling make sure you keep him that way
    & Trump’s the only friend we have at that level.

  2. For the first time since I have been reading Motorbike Writer, I see obvious political sniping throughout an article, especially the last sentence. I’d prefer we just stick to the facts.
    I think that behind all this, Harley sees its future in Asia as the US baby boomers give up riding and the youngsters look to other brands. So to avoid the heavy tariffs imposed on American-made motorcycles in Asian countries – which are a fact, not fake – they are going to shift production to avoid them – and take advantage of cheaper labour into the bargain. It is very convenient to blame Trump, but they might do well to remember that Harley in particular – a company which relies on “American Legend” status – may well alienate a significant section of its traditional (and I suspect significantly Republican) customer base by shifting production offshore and dumping the blame onto Trump. But there is a bigger aspect to this story: steel and aluminium are strategic commodities and America, as the world’s foremost military power, cannot afford to rely on foreign suppliers and extended supply lines for the materials needed to build and maintain the ships, tanks and aircraft necessary to retain that position. The Pentagon and Dept of Defense knows that a viable steel industry is vital in that regard. So from their perspective, if non-strategic manufacturers like Harley suffer the consequences, so be it.
    But the bottom line, in my opinion, is that I think somebody at Harley believes that its future lies not in the large out-dated V-twin cruisers of yesterday, but smaller, cheaper Asian-made runabouts for a truly mass market. Which is fine, but blaming Trump is being disingenuous and may well backfire on them.

  3. Short memories. Harley is only here because Ronald Regan put massive tariffs on foreign
    bikes and bailed them out in the 80’s. Now they’re squealing and heading offshore….Look what happened to ‘our’ automotive industry millions in taxpayer funds spent and off they go
    Trump has a point. Too bad our politicians don’t have the guts to do the same.

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