Trump threatens 'reciprocal tax' on motorcycles imported from India

Not enough, he says on India reducing duty on motorcycles; unhappy with high import tariffs on Harley-Davidson

Updated - February 14, 2018 09:11 pm IST

Published - February 14, 2018 07:05 am IST - Washington

 U.S. President Donald Trump holds a meeting on trade with members of Congress at the White House in Washington on Tuesday.

U.S. President Donald Trump holds a meeting on trade with members of Congress at the White House in Washington on Tuesday.

President Donald Trump on Tuesday brought up the high import duty in India on the Harley-Davidson motorcycles as an example of unfair trade and threatened to increase the import tariff on "thousands and thousands" of Indian motorcycles to the US. Mr. Trump had raised Harley-Davidson in March 2017 in his first address to the U.S Congress, and several other administration officials have cited the example subsequently in discussions on their 'America First' policy. 

On Tuesday, during a discussion with members of the Congress on the steel industry, Mr 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 sought "zero tax" on the import of motorcycles, since the U.S does not impose any tariff on motorcycles from India.

'Our tax is nothing'

"We have so many countries……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," the U.S President said. "..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.

After Mr. Trump mentioned the tariff on high-end motorcycles in March, the Indian government had worked on reducing it. 

On February 12, India announced reduction in tariffs on motorcycles, while the government’s overall approach in the recent budget was to raise duties on many items. Prime Minister Narendra Modi told Mr. Trump about the decision even before it was announced, the latter indicated. "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," Mr Trump said, in an apparent reference to conversation with Mr. Modi, which was on February 8. The Central Board of Excise and Customs (CBEC) announced the decision to slash customs duty on motorcycles to 50 per cent. It was up to 75 percent for new ones and 100 percent for used motorcycles, earlier.

But Mr. Trump is not happy with the decision. "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. And I think we should have a reciprocal tax," the US President said.

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