WASHINGTON (BRAIN) — The bike industry got good news on tariffs on Friday from two directions.
First, the Trump administration's Phase 1 trade agreement with China means products that had been hit with a 15% tariff starting in September will see that rate cut in half. Those products include many bike-related items, including lights, helmets, locks, shifters, derailleurs, wheels, seatposts, handlebars, and other items.
Separately, the administration granted a tariff exclusion to bikes with 20-inch wheels. The industry imports about $140 million of these bikes from China each year.
The exclusion means importers will no longer have to pay the additional 25% Section 301 tariff on these bikes until the exclusion expires August 7, 2020.
Unlike previous exclusions that were narrowly written, this exclusion applies to all products imported under the HTS code 8712.00.1520, which includes all non-motorized bikes with wheels between 50-55cm (19.7-21.7 inches). The exclusion came at the request of several different companies and organizations, including the BMX brand Kink; Downtube, an importer of folding bikes with 20-inch wheels; Trek; QBP; Huffy; BikeCo; and PeopleForBikes.
Additionally, importers are entitled to recover the additional tariffs they've paid on the bikes since they were put into effect Sept. 24, 2018. Tariffs on these bikes had been 11% before the Trump administration added another 10% on that date, which increased to an additional 25% (for a total of 36%) in mid-2019. Now the tariff returns to 11%.
PeopleForBikes calculates the industry will be able to recover $19.6 million in paid tariffs.
"This is a significant win for the industry," said Alex Logemann, PeopleForBikes' policy counsel.
"Today's action is representative of the strength our industry can have when it unites behind policy initiatives. Nine product exclusions for PeopleForBikes, its members, and other companies in the bike industry were granted. I would specifically like to thank the PeopleForBikes and BPSA Legal, Legislative, and Safety Subcommittee, and particularly the Chair Matt Moore, for their engagement and hard work in September when we filed these requests."
Logemann noted that the industry has requested exclusions for other products, including other sizes of kids bikes. The USTR has moved the exclusion requests for the other kids bikes to "stage 3," meaning it has approved the exclusion but is examining whether the exclusion could be administrated by US Customs before making it official.
"We will be monitoring these with cautious optimism," Logemann said.
The administration has previously granted exclusions to narrow product categories, including some singlespeed adult road bikes, some cruisers, carbon frames valued under $600, and some wired cyclocomputers.
Most other bikes, e-bikes, and many parts & accessories remain subject to the 25% additional tariff plus any pre-existing tariffs.
The Phase 1 deal also means China-made products that had been set to receive a new 15% tariff on Sunday, Dec. 15, will no longer get that tariff. Balance bikes are one of the few bike-related products on that list, however.
"We are pleased to see significant progress in negotiations between the U.S. and Chinese governments,and we applaud the Phase 1 deal as a key milestone in progressing towards a complete resolution of this conflict," Logemann said.
