New tariffs proposed for bicycles and bicycle products
Tariff increases on Chinese goods are the result of an investigation commenced by the U.S. Trade Representative (USTR) in August 2017 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. The investigation focuses on the theft or unfair transfer of intellectual property and advanced technology from American businesses to the Chinese government. It does not include Taiwan or other countries.
Tariffs proposed as sanctions against China have quickly grown to encapsulate most consumer products – not just high technology goods. The USTR’s Section 301 homepage can be found here.
As of May 14, 2019, four rounds of tariff increases have been proposed and/or implemented on Chinese goods imported into the U.S. We will keep this page updated with the latest information.
Round 4, announced May 10, 2019
- Bicycle-related products affected: Includes helmets, lights, locks, apparel, children’s balance bikes, wheels, handlebars, grips, shifters, shoes, miscellaneous bicycle components and lithium ion batteries. To view USTR’s proposed list of products and the process to submit for an exemption, click here.
- Valued amount of product list: $300 billion
- Tariffs: 25% increase on existing tariffs, not yet implemented
- Industry action: The bike industry submitted requests and testified in Washington, DC, to exempt bicycle products from this round of tariffs, consistent with past efforts.
- The USTR delayed implementing these tariffs until further negotiations between the U.S. and China take place. There is no timeline for putting these tariffs in place.
Round 3, announced July 17, 2018
- Bicycle-related products affected: Approximately $1 billion worth of bicycles, components and accessories. To view USTR’s proposed list of products, click here. The formal exclusion request process is expected to be published end of June, but the proposed form to submit an exclusion request is here.
- Final valued amount of product list: $200 billion.
- Tariffs: 25% increase on existing tariffs, implemented May 10, 2019; 10% increase on existing tariffs implemented September 24, 2018 to May 9, 2018 (4.7% of duties were exempted for this round, a de minimis amount)
- Industry action: The bike industry generated a vocal show of opposition to USTR through the public comment process to exclude bicycle products from this round of tariffs. We were the most vocal presence of any industry that has had products included within the Section 301 tariff increases. We generated 967 comments to the USTR, sent 7,768 letters to members of Congress, had 10 bike industry executives testify against the tariff increases at hearings in July and August 2018, and engaged members of Congress to get them to speak out against the tariffs. On August 30, 2018 PeopleForBikes, the National Bicycle Dealers Association and the Bicycle Product Suppliers Association submitted an official comment to the USTR. Read the testimony here. The industry was successful in getting bicycle helmets and light sets excluded from this round of tariffs.
- The USTR opened an exclusion process for businesses to comment on these tariff increases. If you are a business owner, you are positioned to make a compelling case against increased tariffs on the bike industry. The comment process is open through September 30, 2019. PeopleForBikes will create resources for the industry to file exclusions for their products through written comments to the USTR and will post them on this page.
Round 2, announced June 20, 2018
- Bicycle-related products affected: Electric bicycles and electric bicycle motors. To view USTR’s proposed list of products, click here. View the final notice here.
- Final valued amount of product list: $16 billion (1.7% of duties were exempted for this round, a de minimis amount)
- Tariff: Tariffs on electric bicycles imported under Harmonized Tariff Schedule (HTS) headings 8711.60.00 or 8711.90.01 increased from zero to 25%. Tariffs on e-bike motors imported under HTS heading 8501.31.40 increased from 4% to 29%. These were implemented on August 23, 2018 and are still in place.
- Industry action: The USTR has concluded its public comment process for the proposed 25% 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. This exclusion application was not granted by the USTR.
Round 1, announced April 6, 2018
- Bicycle-related products affected: GPS units, view the final notice here
- Final valued amount of product list: $34 billion (of $50 billion originally proposed — 38.5% of duties were exempted because the USTR found that including them would not influence a change in China policy but would disproportionally hard U.S. interests)
- Tariff: 25% increase on existing tariffs, effective July 6, 2018
If you see something that you think should be added to this list, please email Morgan Lommele.
Exemption vs. exclusion
- Exemptions apply to the entire HTSUS subheadings (e.g. 6506.10, bike helmets).
- Exclusions are more precise, permitting relief for specific products.
- Exclusions are filed on a product basis and are not company-specific
- Valid for one year and are retroactive to the first date of additional duties
- List 1 has granted exclusions, none yet for List 2 and 3
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?
A process is currently open to apply for an exclusion from the Round 3 list of tariffs. The bicycle industry plans to apply for exclusions of bicycle products. Details on the process can be found here. Although there is reluctance to exempt tariff lines to maximize the government’s negotiating leverage, the industry should stay vocal and concerned in defending our business interests.
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?
August 30 (2018) 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 (2018) 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.