TEMPE, Ariz. (BRAIN) — State Bicycle Co., a consumer direct bike brand, recently moved production of two of its most popular models to Taiwan from China to lessen the effects of tariffs during the ongoing U.S.-China trade war.
State is now having its Core-Line and 4130 Steel lines manufactured in Taichung, Taiwan. This week, State released its Fall Collection '19 for those Taiwan-made models. The company has manufactured bikes in Shenzhen, China, and Wuxi, China, previously. The company told BRAIN it sells between 10,000 and 20,000 bikes a year.
Mehdi Farsi, who co-founded State Bicycle in 2009, said the company has long relationships with Taiwanesse-based suppliers for various components and small-batch bikes. In September 2018, Farsi said the company looked at relying more on Taiwanese-based suppliers because of the growing trade war.
"There are always benefits to having diversity in the supply chain," Farsi said. "We can work with suppliers who have different specialties (i.e., specializing in aluminum frame construction vs. steel), we can take advantage of various currency fluctuations, and prevent potential disruptions due to various factors out of our control."
Farsi said he thinks more bike companies will be following State's lead. "But not just bicycle companies," he said "It seems as though many industries and companies need to safeguard themselves due to uncertainty right now."
The added 25% tariffs imposed on many Chinese-made goods have impacted retailers and their suppliers. Ninety-eight percent of the bikes sold in America come from China.
"We are trying to maintain good relations with our Chinese suppliers should things change, and also there is longer onboarding process for certain lines of bikes."
