How Trump is wrong about Harley-Davidson

President Trump mentioned Harley-Davidson in a recent address to Congress, but as usual, he seems to have the story all wrong.

Fake news!

Last month Harley execs met Trump on the White House lawns with five of their Touring motorcycles.

“They wanted me to ride one, and I said ‘No thank you.’,” he told Congress.

There seems to be no record of Trump ever having ridden a motorcycle and the last thing he would want right now is an excuse for the media to lampoon him … he’s doing a good enough job of that himself.

“At our meeting, I asked them, how are you doing, how is business? They said that it’s good,” Trump told Congress in his hour-long speech.

“I asked them further how they are doing with other countries, mainly international sales. They told me – without even complaining because they have been mistreated for so long that they have become used to it – that it is very hard to do business with other countries because they tax our goods at such a high rate. They said that in one case another country taxed their motorcycles at 100%.

“They weren’t even asking for change. But I am.

“I believe strongly in free trade but it also has to be fair trade,” Trump said.

Where Trump is wrong

Of course Harley didn’t complain.

Their international sales are up 2.3%. In fact, in India, where they face a 100% import duty, their sales have almost trebled in the past year.

Furthermore, the company now manufacturers Street 500 and 750 models in India to avoid the duty.

Harley Street 750 and 500

By the way, that duty is not just imposed on Harley-Davidsons, but all bikes over 800cc. India is a crowded and polluted place and the duty is imposed to restrict large vehicles.

Also, the $1 million in tariffs India collected on Harley, Indian and Victory motorcycles in 2015 is about the same as the tariffs the US collects every year on Indian clothing products, alone.

Trouble at home

In fact, where Harley is not doing well is within America, in particular with Trump supporters. The US President didn’t mention that.

Harley still has a little over 50% of domestic road bike sales, but it is gradually reducing because their major buyer is the ageing white male. Interestingly, these represent a high proportion of Trump supporters.

Harley has identified that to grow its sales in the USA, it needs to reach out to women, Hispanics, black African Americans and young people. Interestingly, these represent a high proportion of Trump detractors.

US import dutiesRiders used as political footballs motorcycles motorcycle Stiurgis Motorcycle Rally bison

While Trump complains about tariffs imposed on American goods overseas being higher than they impose on imported goods, he also didn’t mention the US push for a 100% duty on motorcycles.

The Office of United States Trade Representative (USTR) is planning to introduce a tariff of 100% or more on European motorcycles with an engine capacity of 51cc-500cc.

The push is the result of a trade war between the European Community and the United States over hormones used by US farmers in beef cattle.

It seems motorcycles have a new purpose – political footballs.