As you might have heard, US is now on a trade war with China. Trump administration is considering the implementation of 25% tariffs on a wide range of goods, including bikes and accessories for them.
If introduced, what could this mean for you as a consumer? Quite simply, at least, 25% increase in price. Again, it’s not approved as of now, but has a fairly high chance to become that, considering 25% tariff on e-bikes is already in place starting August 23, 2018.
What goods are included in tariff list?
Everything from entire assembled bikes to chains, pedals, helmets, lights to bike computers. Full list of bike-related HS codes and categories can be found here.
But will it affect all bikes?
We expect that tariffs will hit budget segment the most. Why? Let’s have a look at statistics first. Here are the facts:
Of all bikes sold in the US, we import 99%, and that was about 17.8 million units in 2014
Of that amount, 66% are imported from China, about 27% from Taiwan and the insignificant rest from other countries
Now, given that cheaper bikes are made in China and more expensive and higher-end models are made in Taiwan (not affected by tariffs), you have an answer.
What about accessories, we haven’t found exact stats as to what percentage can be attributed to China, but we expect it’s very close to the bicycle breakdown, with more technologically advanced accessories like computers and GPS units coming from places like Taiwan and more simple ones like tyres or lights coming from China.
Why are the tariffs proposed?
Simply put, to resurrect domestic bike production. Over the past decades, nike manufacturing has shifted almost entirely towards East. However, it’s not as easy as it sounds. With a few exceptions (like Kent International with their new factory), bikes manufactured in the US are niche products, targeting certain demographic or priced extremely high. Vast majority of mass-market bikes are still imported. At the same time, components used in those US-made bikes, are all imported.
What can be done to oppose these changes?
Bike manufacturers are already doing their best to revert these tariffs. Even though it will largely affect smaller manufacturers who can’t make changes in their supply chain and move production to countries like Cambodia, bigger manufacturers like Trek are taking part in hearing about these new proposed rate hikes.
Private individuals are limited to contacting members of Congress and office of US Trade Representative. More details can be found on People For Bikes.