U.S-India Trade Relations to Be Affected by Harley-Davidson Sales

The United States and India have been locked in a complicated trade game for some time now, with the two countries imposing tariffs on each other’s products.

In the latest development, India is to decide this Friday whether to impose or again delay retaliatory tariffs on some American products, including almonds, apples, and walnuts in response to the Trump administration’s decision in March to impose tariffs on steel and aluminum imports.

The U.S. administration is also to decide by next week if it would penalize India for not abiding by President Donald Trump’s Sunday deadline for all countries to stop importing oil from Iran, The New York Times reports.

“The sanctions threat and the tariffs are in many ways linked,” said Sreeram Chaulia, dean of the school of international affairs at O. P. Jindal Global University outside New Delhi.

However, the Times adds that President Trump has not demonstrated much interest in such policy questions in general, but has rather focused on only one part of the trade relationship between the two countries – India’s tariffs on a few hundred high-end Harley-Davidson motorcycles sold in the country each year.

More specifically, the President has complained about the import duties — currently 50 percent — that India levies on Harleys and other foreign-made motorcycles. During a news conference in October, Trump falsely stated that this duty is 100 percent.

“You send a motorcycle into India, there’s a 100 percent tariff. Who’s going to buy it? It costs you so much. Now, they have already reduced that substantially, but it’s still too high,” he noted at the time.

But trade experts say that the Harley-Davidson issue is not even remotely significant when it comes to erasing the trade deficit. According to Chaulia, in the context of the $126.2 billion in overall trade between the two countries, Harleys are not even a rounding error. He stresses that passenger jets, oil and gas, as well as certain food products are much more important in this respect.

However, despite the relative insignificance of these motorcycles, Chaulia said easing tariffs on them would be a win for President Trump and would thus help ease the trade drama.

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