Monday, June 17, 2024

USA: E-bikes could become more expensive after June 14

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In the USA, e-bikes could become significantly more expensive, as importers of Chinese-produced parts will face higher costs. An exclusion from tariffs imposed on imports from China will expire on June 14, meaning importers will pay an extra 25% duty on top of any existing tariffs. The change affects e-bikes, carbon fibre frames and children’s bikes. However, given that the vast majority of e-bikes start life in China, it is possible that e-bikes from most brands will become more expensive for consumers.

Last week, the Biden administration announced dramatic new tariffs on imported goods from China, including an increased tariff on electric vehicles. At the time, it was unclear how the new rules would impact the e-bike market.

Now, Bicycle Retailer and Industry News reports that e-bikes, children’s bikes and some carbon fibre frames will have a 25% increase on any existing tariffs — a substantial increase.

Until June 14, these products were exempted from the Section 301 tariff. The tariff was introduced in 2018 to even out competition between US and Chinese producers, but some industries, including the e-bike market, were given an exemption. The exemption has been extended several times over the past few years, but this time, the Biden administration has decided not to extend it any further.

For domestic producers, the change will make it easier to compete with foreign imports, which will now be significantly more expensive. However, there are very few domestic e-bike producers, with the vast majority made at least partially in China. For US retailers or brands who use Chinese-imported goods, this will put a strain on margins and likely lead to higher prices for consumers.

Additionally, it could change the landscape of the online market for Chinese frames and bikes. Currently, lots of cyclists choose to buy carbon frames or e-bikes directly from Chinese sellers, often through no-name brands. Now, they might find those products come with an unwelcome import cost when they enter the country.

Cycling advocacy group PeopleForBikes have encouraged the US Government to renew the exemption, stating in their 2024 agenda:

“Sudden tariff increases of 25-100% dramatically depress the economic success of the bike industry.”

The group estimates that exclusions from tariffs have saved the cycling industry more than $130 million since 2018, and they want more policies like it:

“PeopleForBikes actively pushes for tariff exclusions, beneficial trade program renewals, and other policy reforms that create a more predictable and supportive culture of trade policy in Washington, D.C.”

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