Just when the market for e-bikes was exploding, it gets blown up.
The President of the United States is unhappy with the nation's balance of trade with other countries. Fortunately, he has an easy solution.
In his trade war on China, the US is going after specific items, and e-bikes are likely to be subject to a 25 percent tariff. This, of course, at a time when e-bikes are just becoming popular and affordable, partly due to Chinese imports. And it's not like there is much of an industry in the USA to protect; according to Bicycle Retailer, most big American companies are importing their bikes.
When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win. Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore-we win big. It’s easy!— Donald J. Trump (@realDonaldTrump) March 2, 2018
Some bike brands say a 25 percent tariff on import cost would be multiplied roughly three times, in dollars, at retail price. So an e-bike valued at $1,000 at Customs would be slapped with a $250 tariff, resulting in a $750 increase on the sales floor...Not all e-bikes come from China, of course. But Trek, Giant, Accell, Pedego and some smaller brands all manufacture at least some e-bikes there.
This makes life very difficult for those in the industry.
The whole situation is "frustrating and distracting," said Matt Moore, who chairs the legislative committee for the Bicycle Product Suppliers Association and is general counsel for Quality Bicycle Products. "The frustration is that we all deal with a long horizon on product planning and sourcing and it's not easy to just up and change your manufacturer or assembler at the drop of a hat. It just doesn’t work that way," Moore said. "You've been planning for a product that's not going to be available for nine months or a year, and now you don't know if it's going to have a price that's competitive."
So why is the government going after e-bikes, when there isn't that much of an industry in the USA to protect? Perhaps it is because we are not alone in suggesting that e-bikes will eat cars, and that fewer e-bikes mean more cars being made, more fossil fuels being consumed, which is Trump's heaven.
To be fair and balanced, it should be noted that the European Union, which has a lot of e-bike manufacturers, is considering a whopping 189 percent tariff on Chinese bikes. They now have a big chunk of the market and a few locals have declared bankruptcy. From the Financial Times:
“Unless we stop China dumping e-bikes they will soon control the majority of the EU market, destroying our investments, innovation and competitiveness, as well as substantial employment and the protection of the environment,” said Moreno Fioravanti, secretary-general of the European Bicycle Manufacturers Association.
But in North America, e-bikes are just getting started, and this tariff might just strangle the industry at birth. Which is probably the whole point.