by Michael Stumo, CEO of CPA
Contrary to what you may have heard, Harley Davidson, the iconic American motorcycle company loves high tariff countries. Company management loves tariffs so much, it moves production to countries with the highest motorcycle tariffs in the world.
Harley Davidson was founded in Wisconsin in 1903. America now has among the lowest tariffs on imported motorcycles in the world, averaging less than 1%. US leaders believed, in the past, that unilateral tariff reduction would be good for our country. But our low tariff country does not fit the HD’s business plan.
Instead, Harley moves production to high tariff countries. When the EU announced it would impose 31% import tariffs on motorcycles, the company announced it was moving some production there and out of the US. Only five countries have higher motorcycle tariff levels.
But this is not the first time Harley has chased high tariff countries. It has now become a pattern.
The company has a plant in Bawal, India. India has the highest motorcycle tariffs in the world at 100%. I’ll say it differently, no country in the world has higher tariffs on motorcycles than India.
Harley has a plant in Rayong, Thailand. Thailand has 60% tariffs on imported motorcycles, the third highest in the world after India and Vietnam.
The company also has a plant in Manaus, Brazil. Brazil has 20% tariffs on imported motorcycles. To put this amount in perspective, nearly 100 other countries have lower tariffs on motorcycles than Brazil.
Harley also was “delighted” by the tariffs imposed by President Reagan in 1983.
”We’re delighted,” said Vaughn L. Beals, Harley-Davidson’s chairman. ”It will give us time that we might otherwise not have had to make manufacturing improvements and bring out new products.”
Therefore the real Harley story is that the company chases high tariff countries and flees low tariff countries… a story that predated the EU tariff announcement.
Table: Motorcycle tariffs around the world
| COUNTRY | YEAR | TARIFF LEVEL |
| India | 2016 | 100 |
| Thailand | 2016 | 60 |
| Brazil | 2017 | 20 |
| Vietnam | 2017 | 68.97 |
| Pakistan | 2016 | 50 |
| China | 2017 | 43.33 |
| Laos | 2018 | 36.88 |
| Angola | 2016 | 34.17 |
| Cameroon | 2014 | 30 |
| Central African Republic | 2016 | 30 |
| Chad | 2016 | 30 |
| Congo | 2014 | 30 |
| Egypt | 2017 | 30 |
| Gabon | 2013 | 30 |
| Philippines | 2017 | 28.92 |
| Ecuador | 2014 | 28.44 |
| Nepal | 2016 | 27.78 |
| Algeria | 2017 | 26.32 |
| Argentina | 2017 | 25.63 |
| Bangladesh | 2016 | 24.21 |
| Zimbabwe | 2017 | 22.14 |
| Indonesia | 2016 | 22 |
| Djibouti | 2014 | 21.83 |
| Colombia | 2017 | 20.63 |
| Congo | 2015 | 20 |
| Madagascar | 2016 | 20 |
| Mauritania | 2014 | 20 |
| Mozambique | 2016 | 20 |
| Samoa | 2014 | 20 |
| Tonga | 2016 | 20 |
| Uruguay | 2017 | 20 |
| Venezuela | 2015 | 20 |
| Malaysia | 2017 | 18.9 |
| Vanuatu | 2017 | 17.86 |
| Paraguay | 2016 | 17.5 |
| Dominican Republic | 2017 | 16.73 |
| Armenia | 2016 | 16.34 |
| Russian Federation | 2016 | 16.34 |
| Kazakhstan | 2017 | 15.13 |
| Albania | 2018 | 15 |
| Cabo Verde | 2015 | 15 |
| Cambodia | 2017 | 15 |
| Cuba | 2017 | 15 |
| Saint Kitts and Nevis | 2014 | 15 |
| Solomon Islands | 2016 | 15 |
| Macedonia | 2017 | 15 |
| Chinese Taipei | 2017 | 14.88 |
| Burundi | 2017 | 14.58 |
| Kenya | 2017 | 14.58 |
| Rwanda | 2017 | 14.58 |
| Tanzania | 2017 | 14.58 |
| Uganda | 2017 | 14.58 |
| Jordan | 2017 | 14.12 |
| Benin | 2017 | 13.08 |
| Burkina Faso | 2017 | 13.08 |
| Côte d’Ivoire | 2017 | 13.08 |
| The Gambia | 2017 | 13.08 |
| Guinea-Bissau | 2017 | 13.08 |
| Liberia | 2013 | 13.08 |
| Mali | 2017 | 13.08 |
| Niger | 2017 | 13.08 |
| Nigeria | 2016 | 13.08 |
| Senegal | 2017 | 13.08 |
| Togo | 2017 | 13.08 |
| Guinea | 2017 | 13 |
| Antigua and Barbuda | 2016 | 12.5 |
| Barbados | 2013 | 12.5 |
| Dominica | 2015 | 12.5 |
| Grenada | 2016 | 12.5 |
| Guyana | 2013 | 12.5 |
| Haiti | 2016 | 12.5 |
| Saint Vincent/Grenadines | 2013 | 12.5 |
| Suriname | 2016 | 12.5 |
| Trinidad and Tobago | 2013 | 12.5 |
| Tunisia | 2016 | 12 |
| Morocco | 2017 | 11.67 |
| Malawi | 2017 | 11.25 |
| Jamaica | 2016 | 10.88 |
| Belize | 2016 | 10.83 |
| Mexico | 2017 | 10.5 |
| Bolivia | 2017 | 10 |
| Kyrgyz Republic | 2014 | 10 |
| Saint Lucia | 2015 | 10 |
| Tajikistan | 2014 | 10 |
| Ukraine | 2017 | 10 |
| Honduras | 2014 | 8.18 |
| Republic of Korea | 2017 | 8 |
| El Salvador | 2018 | 7.08 |
| Israel | 2017 | 7 |
| Turkey | 2015 | 7 |
| European Union | 2018 | 6.73 |
| Montenegro | 2017 | 6.36 |
| Chile | 2017 | 6 |
| Peru | 2015 | 6 |
| Panama | 2017 | 5.63 |
| Bahrain | 2016 | 5 |
| Fiji | 2017 | 5 |
| Kuwait | 2016 | 5 |
| Moldova | 2017 | 5 |
| Mongolia | 2017 | 5 |
| Myanmar | 2018 | 5 |
| Nicaragua | 2017 | 5 |
| Oman | 2017 | 5 |
| Qatar | 2017 | 5 |
| Saudi Arabia | 2015 | 5 |
| United Arab Emirates | 2016 | 5 |
| Yemen | 2016 | 5 |
| Australia | 2017 | 1.43 |
| Sri Lanka | 2015 | 0.71 |
| Botswana | 2016 | 0 |
| Brunei Darussalam | 2017 | 0 |
| Canada | 2017 | 0 |
| Costa Rica | 2017 | 0 |
| Eswatini | 2016 | 0 |
| Georgia | 2017 | 0 |
| Ghana | 2013 | 0 |
| Hong Kong | 2017 | 0 |
| Iceland | 2017 | 0 |
| Japan | 2017 | 0 |
| Lesotho | 2016 | 0 |
| Macao, China | 2017 | 0 |
| Mauritius | 2017 | 0 |
| Namibia | 2016 | 0 |
| New Zealand | 2017 | 0 |
| Norway | 2017 | 0 |
| Papua New Guinea | 2014 | 0 |
| Seychelles | 2018 | 0 |
| Singapore | 2017 | 0 |
| South Africa | 2017 | 0 |
| Zambia | 2016 | 0 |
SOURCE: WORLD TRADE ORGANIZATION
