For a second time in two weeks, US President Donald Trump raked up the issue of import duties on Harley-Davidson motorcycles in India. Speaking at a meeting with the nation’s governors at the White House, Trump called for fair and reciprocal trade deals
and repeatedly emphasised that the US was “getting nothing” from New Delhi’s February 12 announcement slashing customs duty on imported high-end motorcycles to 50 percent.
“When Harley Davidson sends a motorcycle to India, as an example, they have to pay 100 percent tax,” Trump said, adding, “Now, the Prime Minister, who I think is a fantastic man, called me the other day and he said we are lowering it to 50 percent. I said okay, but so far we’re getting nothing. So we get nothing, he gets 50 [percent], and they think like they’re doing us a favour. That’s not a favour.”
He was referring to conversation with Modi earlier this month, a conversation the president also brought up during a discussion with members of the US Congress on the steel industry on February 14. “And a great gentleman called me from India and he said, we have just reduced the tariff on motorcycles,” Trump had said then, adding, “You know what our tax is? Nothing. So I say we should have reciprocal taxes for a case like that. I am 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.”
According to Trump, when he spoke with the chairman or the president of Harley – who he claims weren’t even asking for it [duty cuts] “because they’ve been ripped off with trade so long” – they were surprised that Trump brought it up. “I’m the one that’s pushing it more than they are,” Trump said, adding that it was unfair. “That’s not good for you people, especially as governors. It’s just not right and we have many deals like that.”
Trump also took a dig at Modi while addressing the gathering of governors. Starting out by saying that India sells a “big number” of motorbikes to the US on which their country “gets zero”, Trump called Modi “a beautiful man” before proceeding to somewhat imitate his soft, serious speech style – thankfully minus an Indian accent this time round – complete with clasped hands. “He said I just want to inform you that we have reduced it to 75 and we have further reduced it to 50. And I said, huh, what do I say? Am I supposed to be thrilled?”
Earlier in January, the US media had reported that Trump has been known to affect an Indian accent and imitate Modi as he goes about his business in the Oval office.
In the meantime, the trade friction between the two countries continues to heat up, which isn’t good news for bilateral trade – pegged at about $115 billion in 2016, up from $20 billion in 2001. The US buys close to a fifth of India’s goods and services exports. The U.S. Trade Representative’s (USTR) office is “fairly negative” on India at this point and is analyzing the impact of the customs trade tariffs on various American companies, an industry source aware of the matter told Reuters recently. “They are more vigilant than earlier, they are in bulldog mode under Trump,” the source added.
India announced higher import tax on electronics products such as mobile phones and television sets in December, and then on 40 more items, ranging from sunglasses to auto components, in the Budget earlier this month. The move is aimed at giving local industry the chance to grow and is part of a broader plan to lift the share manufacturing makes up of GDP to a quarter, from around 15 percent, and create the tens of thousands of jobs needed for a young workforce.
Even before this new round of hikes, India has been seen as one of the most protected major economies. In 2016, the US had an average tariff rate of 3.4 percent on imported goods compared with 13.5 percent for India, according to the World Trade Organisation (WTO). Even China, which the Trump administration is targeting for its trade practices, had a lower average tariff rate of 9.9 percent.
With agency inputs
via Donald Trump mocks India’s import duty cut on Harley Davidson bikes; mimics PM Modi along the way