Friday, April 18, 2008

China's tariff on American motorcycles contributes to Harley-Davidson layoffs in Pennsylvania

A June 9 2004 issue of reported that Harley-Davidson was hoping to export motorcycles to China without building a factory there. Harley-Davidson is one of the few American manufacturers that still produces its goods in the United States. It just has one foreign factory (in Brazil).

The article reported that China had a 50% tariff on its imports of Harley-Davidson motorcycles. That tariff was scheduled to be reduced to 30% by January 2005.

An article in the March 23 2006 issue of Forbes Magazine reported that Harley-Davidson was set to open up its first dealership in China in April 2006. The article reports that China has other limitations preventing the sales of Harley-Davidson motorcycles which it calls "ownership and riding restrictions in most large cities and on highways".

Meanwhile, Harley Davidson announced plans to lay-off 730 United States workers today.

The Chinese strategy is to sell to the United States, but not to buy from the United States. The only way to change that would be for the United States to impose Import Certificates on China which would gradually (over a period of five years) reduce our imports from them to the level of their imports from us. We advocate this step in our book, Trading Away the Future.


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