WASHINGTON (BRAIN) — President Donald Trump on Thursday released an executive memo instructing officials to prepare to impose reciprocal tariffs on a global basis as soon as April 2.
Under Trump's plan, the U.S. would adjust its import duties on a product-by-product basis to match every nation’s tariff on the same U.S. products.
That would cause significant increases in the tariffs on some bike products because some (but not all ) of the largest supplier nations to the U.S. bike industry currently have relatively high tariffs on the books for U.S. bikes, e-bikes, and related products — even if those nations rarely or never import U.S. bike products.
Notably, Vietnam, where many brands have relocated production in recent years as an alternative to China, has a 45% tariff on U.S. bikes and a 55% tariff on U.S. e-bikes. If reciprocal tariffs were imposed, the U.S. tariff on Vietnam-made bikes would become almost exactly the same as the current tariffs on Chinese bikes.
India, long seen as a potential source of bikes for the U.S. mass market, has a 20% tariff on U.S. bikes. Some news sources report that India lowered that rate to 15% this week, ahead of Prime Minister Narendra Modi’s visit to the United States. If matched, that would increase the tariffs on India-made bikes from the current 11% or 5.5% to 15%, not a major increase.
Other nations currently have tariffs on U.S. bike products that are roughly the same as U.S. tariffs or in some cases even lower. For example, the EU imposes a 4.7% tariff on U.S. bike saddles, lower than the 8% that U.S. charges on EU saddles.
The EU has a 15% tariff on U.S. bicycles — if reciprocated, the U.S. would raise its current tariff of 5.5% on EU road bikes and 11% on EU mountain bikes to 15%.
However, EU nations charge a VAT tax on top of import duties, and Trump instructed officials to consider such taxes in developing a reciprocal rate.
Malaysia, where Shimano manufactures pedals, derailleurs, wheels and other components, has a 5% tariff on most U.S. components and a 6% tariff on U.S. bikes. The U.S. currently imposes an 8% tariff on pedals from Malaysia and most other nations.
There remain many questions about how the tariffs would be imposed specifically, and if, for example, the U.S. would lower tariffs to match other nations when appropriate. It's unknown how other nations will react — presumably some will quickly adjust tariffs to avoid a trade war, while others might retaliate in some manner. It's also not clear how quickly U.S. Customs and Border Patrol could update and manage more than 17,000 import codes to match those in the 186 nations that are on the Most Favored Nation list.
Republicans in the U.S. House have introduced legislation that would give presidents the power to impose reciprocal tariffs. The legislation has not progressed and it’s not clear what legal authority Trump would use to enact reciprocal tariffs without that legislation.
