WASHINGTON (BRAIN) — The bike industry is closely watching new legislation introduced in the House, which would give the president a powerful weapon in negotiating trade agreements with every nation on the globe. If the legislation passes and President Trump made use of its full powers, it would cause massive increases in tariffs on bike products from major supplying nations like Taiwan, Vietnam, Cambodia and the EU. Of course the negotiations also could lead to improved trade relationships and potentially increased access to foreign markets for U.S. manufacturers.
Rep. Riley M. Moore, a Republican from West Virginia, introduced the Reciprocal Trade Act as his first act in Congress last month. It would let the president raise tariffs on imports from other nations to match that nation's tariffs on U.S. goods.
The bill, co-sponsored by eight other Republicans, is similar to legislation introduced in 2019 that failed. Trump specifically asked for its powers as part of his campaign's Agenda47.
The U.S. industry currently enjoys relatively low duty rates on products from its major suppliers (except China). That would change if the U.S. matched those nations' tariffs as part of a trade negotiation, although of course the increase could be short-lived if the negotiations were fruitful.
The potential increases are daunting, however.
Vietnam, for example, currently puts a 45% tariff on U.S. bicycle imports, and a 55% tariff on e-bikes. Were those rates reciprocated, the U.S. would increase the tariff on Vietnamese bikes from the current rate of 5.5% or 11% (depending on bike category) to 45%. There is currently no U.S. tariff on e-bikes from Vietnam or anywhere else except China. The tariff on Vietnamese e-bikes would go from zero to 55% if the U.S. reciprocated.
The U.S. imported about 108,000 bikes valued at $50.1 million last year from Vietnam, making it the fourth largest bike supplier to the U.S. after China, Taiwan and Cambodia. Statistics are unavailable for how many e-bikes the U.S. imported from Vietnam, but the country has clearly become a major source of e-bikes in recent years, as has Cambodia.
Vietnam also currently has 45% tariffs on many bike components and a 40% tariff on frames and forks.
Cambodia, which exported $180 million worth of bikes to the U.S. last year, has a 7% tariff on U.S. bikes and 15% tariff on U.S. e-bikes. The U.S. duty on Cambodian bikes is currently 5.5% or 11%, the same as on Vietnam and most other nations; there is no U.S. tariff on e-bikes from Cambodia. Cambodian bike imports were duty free until the GSP (Generalized System of Preferences) expired at the end of 2020. Reauthorizing the GSP is major legislative goal of industry groups including PeopleForBikes.
Taiwan, which exported $309 million worth of bikes to the U.S. last year, has a 6% tariff on U.S. bikes and a 20% tariff on U.S. e-bikes, so if the U.S. reciprocated, the tariff on regular bikes might stay the same while e-bikes would go from zero to 20%.
As for China, it currently has a 7% tariff on U.S. bikes and 45% on e-bikes. China's retaliatory response to Trump's new tariffs this week does not apply to bikes. As of Tuesday, Chinese e-bikes are subject to a 35% tariff — 25% from the Section 301 tariffs imposed during Trump's first term (which were excluded until last June) plus the new 10% imposed this week.
