18 June 2019

Trade War Sends Giant Back To Its Roots

When Trumplethinskin announced tariffs on goods from China, one thing was clear to anyone with an IQ of room temperature or higher:  Jobs would not suddenly re-appear in Ohio and Michigan and Pennsylvania.  Of course, El Cheeto Grande, not being a member of that exclusive club, went ahead with his move.  

Maybe I am not giving him enough credit for his intelligence:  After all, sold the promise of jobs returning, as if they'd simply migrated for a season, to large numbers of people.  Then again, at least some of those people are as desperate as he is avaricious or delusional, depending on what you believe.

So what are the results of those tariffs, so far?  Well, for one thing farmers--many of whose livelihoods are tied to exporting what they grow--are losing sales.  And it doesn't look like jobs are coming back to the US, at least not in the bicycle industry.

Prices are already increasing for many bikes and related goods.  But the world's largest bicycle producer found another way to deal with those new import taxes:  going back to its roots.

I am talking about Giant.  Chairwoman Bonnie Tu said, "we took it seriously," when Trump announced a 25 percent surcharge on almost everything coming from China.  "We started moving before he shut his mouth."

Giant's factory in Taichung City, Taiwan

That meant, of course, she had a very short window of time in which to act.  But act she did:  She shifted production of the company's US-bound bikes from its Chinese factories to the company's headquarters in Taichung City, Taiwan.

The first Giant bikes sold in North America during the 1980s were made in Taiwan.  So were all of the products the company exported to the America, and most to the rest of the world, during the 1990s and early 2000s.  

Bonnie Tu

Ms. Tu says, though, that the company's long-term plan involves moving as much production as possible as close to the markets as is feasible.  Right now, in addition to its Taiwanese facility and the five factories it operates in China, Giant also has a plant in the Netherlands and has announced they are building another in Hungary.

Will Giant start making bikes in the US?  Ms. Tu hasn't said as much, but it wouldn't surprise me if they set up shop in some low-wage "right to work" state in the South.  If they do, I just hope the bikes are better than some of the stuff that came out of Schwinn's since-shuttered Greenville, Mississippi plant.


  1. My late ex-father in law owned a company whose workers unionised. He moved the plant to the south to get away from the union. Turned out that they organised there, too. He actually drove himself into an early grave trying to keep the unions out. i've often wondered why he didn't go offshore if he hated unions so much?

    Tariff-man & his ilk are reaping the whirlwind they sowed when they demonised the unions and cried about labour costs to the point that drove domestic companies overseas, and then later complained that nothing is made in the USA any more.

  2. Mike--Some folks will do absolutely anything to avoid unions, won't they?

    I have to wonder whether the folks you describe in your second paragraph are mendacious or simply ignorant when they create the very conditions they decry.