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First, some background. In 2017, Harley-Davidson announced that it would build a plant in Thailand, its third offshore production facility after Brazil and India. The decision made sense from a trade perspective. Thailand’s tariff on 871150 is a stunning 60 percent. Worse still, it’s not even bound under Thailand’s commitments at the World Trade Organization (WTO), meaning there is no legal limit on how high this tariff can go. To skirt this risk, Harley-Davidson engaged in “tariff-skipping foreign direct investment,” making some bikes in Thailand to avoid wild fluctuations in import duties. The company used this same strategy in India, which has a whopping 100 percent tariff on 871150, and no bound rate.
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