Before someone spouts off about the article, just a friendly reminder that Forbes Magazine is considered part of Conservative media. Yes Harley Davidson was a great choice as an American brand, but the reasoning is backwards. Harley makes a profit in the Pan-Asia market, but lacks the product to truly compete in an area that thrives on smaller lighter bikes and scooters. – PB/TK
Trump’s ‘Help’ For Harley is Hurting The Bike Maker – David Kiley, Contributor Forbes March 2, 2017
There aren’t too many brands that are as iconically “American” as Harley Davidson. And when Donald Trump invoked the “Hogs” in his speech to the nation Tuesday night, he thought he was calling attention to unfair trade deals inhibiting American companies and workers abroad.
Not so fast. It turns out that the high tariffs faced by Harley when trying to sell its bikes overseas would have been substantially removed by the Trans-Pacific Partnership, which Trump squashed his first days in office. In Vietnam, for example, Harley faces a 74% tax. It would have been zero if the U.S. signed on to TPP. Indeed, Harley’s CEO and chief lobbyist publicly advocated for TPP last year.
Trump repeatedly called TPP a U.S. “job killer.” Trade experts disagree, arguing that it was just the opposite, but got caught up in the political rancor and rhetoric of a campaign, rightfully referred to as “the silly season.”
Trump seems fairly fact-challenged in his use of Harley to call attention to unfair trade. He complained that there is one country that charges a 100% tariff on imported motorcycles. That’s true. It’s India. But Harley has a factory in India that supplies bikes to consumers there, so those bikes aren’t subject to the tariff. India, a developing country, put heavy tariffs on some categories of products to force companies to build factories in their country and create jobs for their working class. Indonesia, another country with a tariff, hits imported motorcycles with a 40% tax for the same reason.
In a statement, Harley-Davidson said it opened the plant in India in 2011 “to improve production flexibility, market responsiveness and strengthen operations in the country.” It doesn’t address whether the tariff played a part in its decision, but it did, of course.
India is a huge market for motorcycles and scooters – 16.5 million per years. Harley has less than a 1% share of that market. But that is because Harley does not make the kinds of bikes that are most popular in India, where there are many manufacturers vying for share at much lower price points.
Tariffs on motorcycles are common across the Asia-Pacific region. Besides India and Indonesia, China levies a 30% tariff, as does Malaysia. Thailand hits Harley with a 60% tariff, and Taiwan’s tariff is 20%. Malaysia and Singapore were also part of TPP, and there was hope that Indonesia would have joined it eventually.
Continue to msn.com article: http://www.msn.com/en-us/autos/news/trumps-help-for-harley-is-hurting-the-bike-maker/ar-AAnGG24?li=BBmkt5R&ocid=spartanntp
