Bike sales hurt by import tariffs on Chinese products

The US bicycle industry is taking a direct hit from US trade tariffs on bikes and parts made in China and is calling for the trade dispute to be resolved.

As talks to end the 10-month-old trade war between the world's two largest economies stalled, US President Donald Trump on May 10 announced he was raising existing tariffs on $200 billion in Chinese goods from 10 percent to 25 percent.

The move prompted Beijing to retaliate by raising tariffs on $60 billion of US goods as of June 1.

US Treasury Secretary Steven Mnuchin said on Wednesday that the United States was still studying the potential impact on US consumers but "there won't be any decision probably for another 30 to 45 days." He testified before the US House of Representatives Financial Services Committee.

For bicycle shop owners and makers in the United States, Trump's proposed increase of tariffs from 10 percent to 25 percent would hit their businesses hard.

China accounted for 94 percent of the 15.3 million bikes imported into the US in 2017, according to the Bicycle Product Supplier Association. At least 500,000 bicycles are manufactured in the US, but many of their components come from China.

According to market researcher NPD Group, the number of bikes sold in the US dropped by 15 percent in the first quarter.

A 10-percent US tariff on Chinese goods already effect since September has hurt sales, Nyle Nims, president of Cycle Force Group in St Ames, Iowa, told China Daily.

Nims said that he has been buying products from China for more than 40 years. "We don't have intellectual property issues in our industry to speak of, or I'm aware of, so I don't think it's a major issue. If that's the main driver of this, (it is) best settled by intellectuals who know how to deal with it," he said.

Ryan Zagata, president of the Brooklyn Bicycle Company in New York, told China Daily: "As of about 10 or 12 days ago, we have bikes on the water that we are going to have to start paying duties on, an additional 15 percent duties on. For every container that comes in, we're probably talking between about an additional $8,000 to $10,000 in additional tariffs for that container."

Zagata said that the base tariffs on bicycles is now 5.5 percent higher, so he is considering a 10 percent hike on his sale prices.

Morgan Lommele, state and local policy director at People for Bikes and the Bicycle Product Suppliers Association, told China Daily that bicycle manufacturing in China occupies about 60 million feet of factory space. "That's taken years and years to establish. Domestic manufacturing of bicycles dried up 20 or 30 years ago, so one of the arguments from the (US) administration is 'gosh, you can move your manufacturing to the US', but in reality if it does go, it's going to go to another Asian country or stay in China."

belindarobinson@chinadailyusa.com

(China Daily 05/24/2019 page11)