WASHINGTON (BRAIN) — The Trump administration has recently announced preliminary trade agreements with some countries that export bicycle products to the U.S., but so far there are no new agreements with the largest suppliers to the industry, and few details on the agreements that have been announced.
This week the administration announced agreements with Japan, the Philippines and Indonesia, with previous agreements announced with Vietnam, the United Kingdom and, very tenatively, China. All the new agreements increase the tariffs significantly from historic levels but are below the initial “reciprocal” tariff rates President Trump announced on April 2. Those reciprocal rates were set to take effect July 8 but have been postponed to Aug. 1.
Until Aug. 1, imports from most countries have been subject to an extra 10% tariff.
The preliminary agreements call for a 15% tariff on Japanese imports, 19% on imports from the Philippines and Indonesia, and 20% on those from Vietnam. The rates would be in addition to long-standing duties on bike and related products, usually between 5% and 11%.
Matt Moore, PeopleForBikes' policy counsel, said he's optimistic about the trade agreements coming out of Washington. "We're making some progress," he said. He cautioned that he's waiting to see official announcements about the specifics of the deals in the Federal Register or in U.S. Trade Representative statements. "U.S. Customs can't work off of statements made on social media," he told BRAIN.
Industry exposure - Japan
The U.S. has a long history of imports from Japan, and Shimano is based there and still manufactures some higher-end components and e-bike motors there. However, most Shimano parts are exported to the U.S. as original equipment on complete bicycles, so are subject to the tariff on the bike’s Country of Origin, which is determined by the frame, not the parts. The U.S. gets most of its complete bikes and e-bikes from China, Taiwan and Cambodia. Mid-priced Shimano parts are often made in Malaysia and Singapore.
Looking at a list of imports of most bicycle products (components, complete bikes and some accessories, but not e-bikes or softgoods), the U.S. gets only about 2% of its bike stuff from Japan. The 15% agreement is above the current 10% in place since April, below the 25% proposed in the reciprocal tariff announcement, and well above the MFN free trade in place previously.
Industry exposure - Vietnam
The U.S. imports a significant number of e-bikes from Vietnam — an exact figure is difficult to obtain because e-bikes imports are not counted separately from electric motorcycles. Even not counting e-bikes, though, the U.S. imports about $68 million in regular bikes and other bike goods from Vietnam, so the 20% tentative agreement announced July 3 is good news for the industry, even if it is higher than the 10% rate imposed since April 2 and well above the tariffs in place prior to that.
The 20% rate is especially good news because until very recently Vietnam had a 45% tariff on U.S. bikes and 55% on U.S. e-bike imports, so the industry feared that reciprocal tariffs would match those rates. (Vietnam agreed to eliminate all tariffs on U.S. goods as part of the negotiations.)
But wait.
The Trump administration has said it will impose a 40% tariff on products that are imported from Vietnam but which it determines are being transshipped from China or elsewhere. It’s unclear whether e-bikes from Vietnam, which certainly contain motors and other components made in other countries, will be subject to the 40% rate.
Industry exposure - Philippines and Indonesia
Indonesia and the Philippines are both members of the Generalized System of Preferences program and enjoyed free trade with the U.S. until the U.S. GSP agreement expired in 2020. Since then the countries' imports have been subject to standard MFN rates in the U.S. Very few bicycle-specific products from the Philippines or Indonesia show up in U.S. import data — however, it's likely many softgoods including cycling apparel and packs and bags are made there, but are imported under more general import codes.
The new 19% rate with Indonesia is down from the 32% rate threatened on April 2, but up from the GSP free trade agreement that had been in place.
The new 19% rate with the Philippines announced this week is down slightly from the 20% threatened by Trump earlier this month, but above the 17% rate announced April 2 and well above the GSP rates.
Industry exposure - The United Kingdom
In May the White House announced an agreement with the United Kingdom, maintaining the 10% reciprocal tariff on most U.K. goods announced on April 2, but lowering the rate on some U.K. cars. Bike products appear to still be subject to the 10% rate, which is in addition to the long-standing 5.5% and 11% duties on complete bikes. Considering the new tariffs on some other nations, an additional 10% is good news for a company like Brompton, which continues to make all its folding bikes and e-bikes in the U.K. and released some new products specifically for the U.S. market this spring.
Industry exposure - China and Taiwan
The current reciprocal rate on Chinese goods is 10% — down from a threatened 145% — while negotiations continue. U.S. and China trade officials are meeting in Sweden next week and Treasury Secretary Scott Bessen has said the current agreement with China will likely be extended past Aug. 1.
The current reciprocal rate on Taiwan imports is 10%, down from the 32% rate announced April 2. The 32% rate is set to take effect Aug. 1 unless an agreement is reached before then. A delegation from Taiwan was expected in Washington this week.
New legislation
This week a bipartisan group of senators announced a bill that would reduce tariffs paid by small U.S. businesses. Details are not available on the legislation sponsored by five Democrats and two Republicans: Lisa Murkowski of Alaska and Susan Collins of Maine.
Last month, legislation to exempt U.S. bike assemblers from tariffs on components was introduced by a bipartisan group of senators.
