WASHINGTON (BRAIN) — Monday July 23 was the final day that the U.S. Trade Representative accepted public comments about its proposed 25 percent tariff on e-bikes and other goods. A public hearing is scheduled for this Wednesday and at least two industry representative are expected to speak.
Last month the Trump administration added China-made e-bikes and e-bike motors to a list of 284 product categories that it proposes should be subject to the tariff. On the same day the adminstration released a list of 818 product codes, representing $34 billion in imports, that became subject to the duty on July 6. That list includes some bike GPS units, and bearings used by bike component makers and shops.
So far at least 60 people have left comments on the USTR website regarding the e-bike tariff. The comments come from consumers, retailers and industry suppliers. The USTR office moderates the comments before posting them on the website, removing duplicate comments that appear to be part of a mass mailing campaign as well as comments that are marked as containing trade secrets.
Tony Jabuka of The Bike Palace in San Pedro, California, is among the retailers who have left comments. Jabuka told BRAIN last week that he was encouraged to leave a comment by the National Bicycle Dealers Association.
"It's just frustrating because the electric bikes have just started to be seen as a real alternative for people for transportation," he said. "I think it's terrible to raise prices for the consumer, it's just going to slow sales."
In his comments to the USTR, Jabuka echoed those of other retailers, pointing out that he expects the tariff to hinder the growth of his business, and that they do not serve to protect a U.S. business because very few electric bikes are made in the U.S.
"Over the past several years, I have seen the electric bicycle portion of my business grow significantly," he wrote in his comment. "Electric bicycles accounted for 9.8 percent of all wholesale bike sales in the first quarter of 2018. This is up from 5.5 percent of the total market in the same quarter last year. This is the fastest growing sector of sales for my business. For this reason, I am concerned these proposals are targeting a massive growth segment for independent bicycle retailers across the country.
Independent bicycle retailers operate on a narrow margin. The threat of decreased sales as a result of a 25 percent tariff on the import of electric bicycles is concerning because it will likely hurt my bottom line.
If implemented, these tariffs will have a significant impact on my store, my employees and customers. I encourage you to modify this policy proposal."
At least three e-bike suppliers have left comments: Faraday, Pedego and Pure Cycles.
Don DiConstanzo, the founder and CEO of Pedego, wrote in part:
"An additional tariff on electric bicycles under 8711.60.00 will deeply harm U.S. based electric bicycles companies that are currently competing with European companies, by increasing the prices for bikes from U.S. based companies like ours and allowing foreign manufacturers to swoop in and take over the market. This investigation should not allow additional tariffs that will negatively impact U.S. jobs and consumers in such a unique sector to the benefit of foreign competitors."
DiConstanzo told BRAIN he plans to testify in Washington on Wednesday. Also speaking will be Bob Burns, the vice president and general counsel for Trek Bicycle. Burns is also representing PeopleForBikes.
In his comment, Adam Vollmer, the founder and CEO of Faraday Bicycles, wrote in part:
"We could not absorb a 25 percent tariff without a significant price increase that would be borne by American customers. For example, an entry-level Faraday electric bicycle costs $2500. A 25 percent tariff could increase that cost by $875, which would make these bicycles less affordable to a significant portion of our potential customer base.
Like other industries, the U.S. bicycle industry relies on a global supply chain to provide our customers with a high-quality, affordable product. A critical component of our business model is a fair and responsible trade policy practiced both domestically and by our neighbors abroad."
In addition to PeopleForBikes and the NBDA, the North American Bikeshare Association also is rallying its members to leave comments. The NABA said the tariff "could increase the cost of e-bikeshare equipment drastically, and hinder the accessibility of bikeshare for all."
The e-bike tariffs are in addition to the current tariffs on aluminum and steel and the proposed 10 percent tariffs on a wide variety of goods — including many bike products. Industry groups are organizing a separate campaign regarding the 10 percent tariffs.
