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What the New Tariff Means to Bike Riders

May 13, 2019

by John Neugent

Tech articles | Commentary articles |

John Neugent probably knows more about bicycle wheels than anyone else alive. Maybe more about bikes as well. He's spent his life in the bike business, at every level. He now owns Neugent Cycling, a firm devoted to delivering world-class equipment at the lowest possible price. If you are in the market for a set of wheels, please, check out John's site. He really knows his stuff. —Chairman Bill

John Neugent

Author John Neugent

May 13, 2019: The new 25% tariff on imports from China affects mostly lower priced bikes, parts and accessories and juvenile products, according to Bicycle Retailer. People in the industry are saying it will have major impacts on lower-end bikes, parts and accessories. The size of the industry has been estimated to be about $6 billion at retail and the new tariffs are estimated to affect $1 billion at import cost.

While most of that will affect lower end products, China is the main source of carbon fiber. Components like frames, rims, and other carbon parts are made there because of the lower costs of manual labor. I understand there are about 50 hours of labor required to make a carbon frame. Many, if not most, of the Taiwan suppliers of carbon frames and rims buy them from China, apply the decals, and ship them to the US.

Most affected would be brands that import directly from China, but it’s not hard to imagine their shipping product from China to Taiwan and then importing it as made in Taiwan. I am sure these are tactics some companies are considering.

Another factor here is that all ports are not created equal. The tariff code is often ambiguous because it was created a long time ago and really does not relate well to some current products. Brokers know which products they can bring in under low tariffs by which port of entry. This is not to disparage the government employees, who are unable to learn the nuance of each and every industry. When computers were first introduced, the popular Cateye had a duty of anywhere from 38% to 5% depending upon which port it entered.

What does this all mean? As you can see from above, the answer is unclear. The only thing for certain is it’s the companies and consumers that will pay for them with higher prices.

Bicycle Retailer & Industry News posted a report on the tariffs.

John Neugent was was one of the first to establish quality hand building in Taiwan around the turn of the century. He now owns Neugent Cycling, a firm devoted to delivering world-class equipment at the lowest possible price.