August 30 webinar: Updates on the confirmed e-bike tariff, how we’re fighting the latest round of proposed tariffs and answers to common questions about what all this means for the bike industry. Download the slides and recording here.
July 27 webinar: A first look at the proposed tariffs and their anticipated effect on the bike industry. Access a recording and slides of our July webinar here.
New tariffs proposed for bicycles and bicycle products
The United States Trade Representative (USTR) has proposed increasing the tariffs on electric bicycles and motors to 25 percent and the tariff for most other bicycle products by 10 percent. Right now these tariffs are still in the proposal phase. They have not been finalized.
Updated 8/2: On Tuesday, the administration announced that they are considering increasing the proposed tariff on bicycles, components and accessories to 25 percent. If implemented, this tariff could increase duties on the bike industry by an estimated $250 million, resulting in higher costs for retailers, suppliers and customers.
Updated 8/7: On Tuesday August 7, USTR announced that the round of tariffs that includes e-bikes and e-bike motors has been approved. This means that tariffs on electric bicycles imported under Harmonized Tariff Schedule (HTS) headings 8711.60.00 or 8711.90.01 will increase from zero to 25 percent. Tariffs on e-bike motors imported under HTS heading 8501.31.40 will increase from four percent to 29 percent. The tariffs will go into effect on August 23, 2018. To read the announcement from USTR, click here.
Updated 9/17: On Monday, September 17, USTR announced that the round of tariffs on bicycle products, components and accessories has been approved. A 10 percent tariff will go into effect on September 24, 2018, and remain in place until January 1, 2019, when a 25 percent increase will be implemented. Read the official press release from the White House here. We will post additional updates as they become available.
Why is USTR taking this action?
The tariff increases are being taken under Section 301 of the Trade Act of 1974. This is a tool that can be used by USTR to impose punitive sanctions on a country engaged in unreasonable or discriminatory practices that burden or restrict U.S. commerce. In this case the primary concern is the theft of U.S. intellectual property by China.
This investigation is specifically focused on China and the proposed tariffs only affect products imported from China. It does not include Taiwan or other countries.
What products are included?
Most bicycle products are included within the scope of this proposal. We are continuing to analyze the thousands of Harmonized Tariff Schedule headings that have been proposed for a 10 percent tariff increase to ensure we capture all products. A preliminary list of affected products is available here.
Updated 9/17: With the exception of bicycle helmets and light sets, all products on the preliminary list were also included on the final list. View a the final list of bike-specific products here. You can also review the complete list of products announced by USTR here.
If you see something that you think should be added to this list, please email Alex Logemann.
What has been done so far to fight these tariff increases?
The USTR has already concluded its public comment process for the proposed 25 percent e-bike tariff. The bike industry made a strong statement to the agency, sending more than 230 comments objecting to the tariff. Delegates from the bike industry also testified against the tariff increase on July 25.
The USTR also concluded public comments on the proposed 10 percent tariffs. On Thursday, August 30, PeopleForBikes, the National Bike Dealers Association and the Bicycle Product Suppliers Association submitted an official comment to the USTR. Read the testimony here.
What are the main arguments against imposing higher tariffs on bicycle products?
Higher tariffs on bicycle imports are misplaced for several reasons. Below are some important points to consider when speaking out against these tariffs:
- The tariffs have been proposed to address allegations that the Chinese government has used unfair trade practices to obtain trade secrets and intellectual property from American businesses. Bicycle technology is not connected to the types of advanced technology that are the focus of the investigation.
- Higher tariffs are unlikely to cause an immediate or dramatic shift in American bicycle production. Asia, and particularly China, is the center of the global supply chain for bicycles and bicycle parts. Any changes to this supply chain will require new investments and time. By imposing higher tariffs on all bicycle parts, the proposal will actually hurt efforts by U.S. companies to product bicycles domestically.
- American jobs will be jeopardized by higher tariffs. Our industry supplies thousands of jobs in engineering, design, sales, and service. Higher tariffs will cause higher prices, and fewer bike sales. Our domestic jobs in the bike industry will suffer as a result.
- Higher tariffs on many of our products is a safety risk for bike riders. Helmets, lights, and parts are all included within the scope of the proposal. This is likely to reduce the use of this important protective equipment and incentivize people to forego mechanical work that keeps bicycles in safe, working order.
What I can do to help stop these tariffs from going into effect?
USTR is undertook a public comment process to obtain feedback on the proposed tariffs before they were finalized. Members of Congress also had an important voice in discussing this proposal with the administration.
The public comment period is now closed. Thank you to everyone who submitted comments and sent letters to their representatives. Because of your help we were able to:
- Generate 7,749 letters to members of Congress.
- File 967 comments with the U.S. Trade Representative’s office
- Place nine bike industry representatives on USTR panels for live testimony
We will post any additional opportunities for action here.
If the tariffs are finalized, is there anything else I can do?
Yes. If any of these proposed tariffs are finalized, the USTR has also created an exemption process where you can apply for exemptions for specific products. This would be most helpful in a situation like e-bikes where the HTS classification includes a broad range of items in addition to bicycle products. Applications must include specific data and be received by October 9. You can view the full details for the exemption process here.
Does the Miscellaneous Tariff Bill Act of 2018 provide relief for any bicycle-related goods?
On September 13, President Trump signed the Miscellaneous Tariff Bill Act of 2018 (MTB) into law, which temporarily reduces or suspends import tariffs and includes 11 products from within the bicycle industry. This is a big win for bike businesses, especially as we aggressively fight tariff increases on hundreds of other products. It is important to note that the MTB only impacts the general rates of duty for covered articles; the MTB does not change or otherwise impact Section 301 duties.
Where I can learn more about the proposals?
To view USTR’s proposal for a 25 percent tariff on electric bicycles and motors, click here.
To view USTR’s proposal for a 10 percent tariff increase on most other bicycles and bicycle products, click here.