TUCSON, Ariz. (BRAIN) — A speaker at last week’s Bicycle Leadership Conference declared “uncertainty” the Word of the Year for this industry and others, with much of the prevailing unease related to U.S. tariffs that have taken effect or been threatened.
The uncertainty continues over Section 232 steel and aluminum tariffs that were imposed earlier this month, a new tariff on products from countries that import Venezuelan oil — which could take effect April 2 and raise the tariff on Chinese bikes to 81% — and reciprocal tariffs that also could be imposed April 2.
‘Only the steel (or aluminum) content’
In February in the Federal Register, the U.S. Trade Representative published lists of several hundred HTUS import product codes that would be subject to steel and aluminum tariffs on March 13. While the lists do not include codes used for bikes or e-bikes, they do include bicycle chains, some bike cables, many fasteners, cable locks, exercise cycles and some exercise equipment — a category that includes bike trainers, according to some importers.
However, the USTR notice specifies that for most product categories on the lists, only the value of the aluminum or steel in the product is subject to the extra 20% tariff. So for example, a bike trainer or exercise cycle with an import value of several hundred dollars should only get the additional tariff on a few pounds of steel or aluminum, a relatively small number.
Taking advantage of this exception requires some new paperwork, however, as the importer must specify where the steel or aluminum in their product was melted and poured (A Customs and Border Patrol FAQ says importers who don't know the material's country of origin can say on a form that it came from "OTH" (Other) or any nation other than the U.S. until they find out definitively). While several importers at the BLC told BRAIN that they expected to take advantage of the exception, none had successfully completed such a transaction as of last week.
Some products on the USTR’s lists remain subject to the extra 20% on the product’s complete value, however. Those are products falling under HTUS codes in Chapter 72 (for steel products) or Chapter 76 (for aluminum products). That includes bike chains and some cables.
Products that are not covered by the HTUS codes on the two USTR lists are not subject to the new steel and aluminum tariffs.
Venezuelan oil
On Tuesday, PeopleForBikes warned industry members that some imports may become victims of the Trump administration’s efforts against Venezuela. In an executive order Monday, the White House said it would impose a 25% tariff on all products imported from countries that buy oil from Venezuela.
PeopleForBikes noted that the extra 25% would take effect “on or after April 2,” be in addition to other tariffs already in place and will stay in effect for a year after the Secretary of State determines the country no longer buys oil from Venezuela.
PeopleForBikes said the administration’s order appears to be directed primarily at China, which buys 68% of Venezuela’s oil exports. Other countries that are significant exporters of bike products to the U.S. and that buy Venezuelan oil include Singapore, Malaysia and Vietnam, but those countries buy a very small percentage of Venezuela’s oil exports.
PeopleForBikes noted that an additional 25% tariff on Chinese goods would bring the total tariffs on Chinese bikes to 81% — a total of: the long standing 11% duty on imported bikes; the 25% Section 301 tariff imposed during the first Trump administration; the 20% imposed on Chinse goods by the new administration; and the extra 25% related to Venezuelan oil imports. The complete tariff on Chinese e-bikes (which don’t have a base duty) would be 70%. Chinese chains would get a total tariff of 95% because they are subject to the steel tariff as well as the others.
Reciprocals
Few details have emerged about the administration’s plans for reciprocal tariffs ahead of next Wednesday, when administration officials are supposed to report their findings to the president.
In an interview Tuesday Trump said the tariffs would be “more lenient than reciprocal” but said there would be few exceptions.
For simplicity if nothing else, some importers are hoping the reciprocals are imposed as a blanket tariff covering all products from a nation. However, imposeding reciprocals on a product-by-product basis would benefit the bike industry because most nations that export significant bike products to the U.S. have low duties on U.S. bike products. An exception is Vietnam, which has tariffs for 45-55% on some U.S. bike products.
Also of concern is whether the administration considers the VAT tax imposed by most EU nations and the U.K. a trade barrier that must be reciprocated. That tax is about 20% for most EU countries. CNBC reported that the White House said this week that it will not count VAT as a trade barrier.
Industry uncertainty continues over materials and Venezuelan tariffs 
