The United States Trade Representative has green lighted electric bikes and associated motors sourced from China to be subject to a 25% tariff, starting August 23rd.
Falling within a list of $16 billion worth of traded items, the USTR pushed live its finalised tariff list on Tuesday, having tentatively published a 284 category proposal back in June. According to the USTR declaration, just five products were removed following a consultation period with the bicycle business’s lobbying unsuccessful.
Prior to the beginning of what is being dubbed as a ‘trade war’ Chinese electric bikes were subject to no tariff and motors just 4%.
During the consultation period the bike industry submitted many hundreds of objections to the proposals. It was further argued by trade representatives in Washington during a July hearing that the tariffs would cause meaningless harm to the bike business and consumers.
There are very few domestic electric bike manufacturers to protect in the U.S., it was argued, meaning that the ‘trade war’ simply damages a growth industry and one that brings green credentials at a time when they sorely need promotion.
This round of tariffs is the second to be imposed under the Trump administration, following an earlier round in which $34 billion of Chinese imports saw altered charges starting July 6th.
That’s not all, however. A third and further damaging round is proposed on an eye-watering $200 billion worth of trade, around $1 billion of which is said to be bicycle related goods. This round had proposed a 10% tariff, though President Trump has successfully lobbied for this too to raise to 25%.
This round of tariffs is open to public comment until September 6th. Those wishing to raise a point can do so at Regulations.gov.
According to the USTR announcement the reasoning for the move is as follows:
- China uses joint venture requirements, foreign investment restrictions, and administrative review and licensing processes to require or pressure technology transfer from U.S. companies.
- China deprives U.S. companies of the ability to set market-based terms in licensing and other technology-related negotiations.
- China directs and unfairly facilitates the systematic investment in, and acquisition of, U.S. companies and assets to generate large-scale technology transfer.
- China conducts and supports cyber intrusions into U.S. commercial computer networks to gain unauthorized access to commercially valuable business information.
It is now highly likely that China will retaliate, as promised, with its own $60 billion tariff round.
Interested in this topic? Catch Jay Townley’s earlier piece asking “Is Trump serious about a trade war with China?”