Mid-Life Cycling

Mid-Life Cycling

23 October 2018

Make American Bikes Again: Will Tariffs Make That Happen?

I've never been very good at predicting the future.  One thing I can tell you, though, is that come the first of January, bikes and anything related to them are going to be more expensive.  Way more expensive.

Currently, most imported bikes are subject to tariffs of 5 to 11 percent. (I learned that when I purchased my Mercian frames.  I was even charged import duties when I had two of my frames refinished by Mercian!)  An additional fee of 10 percent was added to bikes, and most parts, from China in August.  That extra fee will increase to 25 percent when the new year begins.

Given that most new bikes and parts are made in China, and very few are made in the US, most people who buy bikes or parts will notice the difference, if they haven't already.  Now a couple of manufacturers want even higher tariffs, and to expand them to cover more bikes.

Bicycle Corporation of America (BCA) and Detroit Bikes are about as different as any two companies in the bike business can be.  For one thing, the bikes they offer have little in common:  Detroit Bikes offers a full line of city bikes as well as "comfort bikes" assembled in the USA and, for next year, plans to offer a  line of USA-made bikes.  As near as I can tell, their products are aimed at the sorts of riders who might buy, say, a Linus:  folks who want stylish bikes without the price tag of a bike from another Detroit maker: Shinola.  On the other hand, BCA's offerings (some of which are sold under the "Concord" name) seem to consist of kid's bikes along with beach cruisers and inexpensive mountain bikes for adults.


City FC Limited Edition from Detroit Bikes


I laud both companies for their attempts to bring bike manufacturing jobs back--in Detroit's case, to a ravaged city and in that of BCA, to a part of South Carolina that has been economically stagnant for most of the past century.  But I have to chastise them (as if they're listening to me) for asking the Federal Trade Commission to increase tariffs on all imported bicycles to as much as 50 percent.  


BCA Bicycles


Not only that, they want to reduce the de minimis threshold for such duties.  Currently, any package of imported goods valued at less than $800 is not subject to import duties.  BCA and Detroit's petition calls for reducing the de minimis to $50 for at least four years.  That would include, of course, just about any imported bike but could also mean that, say, a package containing bicycle parts such as inner tubes (nearly all of which are made in China) could be subject to the charges.  

To be fair, the US industry as a whole has been lobbying for a reduction of the de minimis for all imports.  So have American companies in other industries.

While BCA, Detroit Bikes and other American bike companies believe that such tariffs will increase their business and bring jobs back to the US, at least one example from another industry shows that their move could backfire.  Last year, the US International Trade Commission recommended tariffs on some photovoltaic cells and large residential washing machines. Last January, the Trump administration approved 30 percent tariffs on the cells, which would decrease after the first year.  On the other hand, it approved a 20 percent tariff on the first 1.2 million washers imported, and 50 percent on any imported after that.

It won't surprise you to know which company initiated the petition for these tariffs:  Whirlpool.  Though the company celebrated its initial success, its profits have declined in recent months because the Trump administration's tariffs on steel and aluminum imports have driven manufacturing costs upward.

So, while Zak Pashak, the Canadian-born head of Detroit Bikes, is excited at the prospect of running three shifts "at full tilt" and thus bringing "hundreds of new jobs" in "an area where we really need jobs", one has to wonder whether his enterprise will be so profitable if he, like Whirlpool, has to pay more not only for raw materials, but also for the parts--almost none of which are made here--he hangs on his frames.

3 comments:

  1. If these companies want to further support 'Murican bike manufacturing they could spec Vari-Wall tubing for their bikes. Vari-Wall is a tubing manufacturer in Ohio making high quality butted tubing. They are the de-facto successors to True Temper since that company left the bike market. If I were having a custom bike built I wouldn't hesitate to ask my builder to use Vari-Wall. They make some tasty stuff.

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  2. Wrong company. Detroit Bikes makes tig-welded affordable production frames and bicycles: https://detroitbikes.com/ while Detroit Bicycle Company is a local custom builder: http://detroitbicyclecompany.com/

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  3. QWERTKEY: I will make the correction.

    Phillip--I didn't know about Vari-Wall tubing. I'll keep them in mind should I ever have a custom frame built in the US.

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