US President, Donald Trump, has imposed a 10% tariff on Chinese goods worth $300 billion in annual imports, including bicycle products that were not previously affected, effective from 1st September.
The President announced his ‘List 4’ of goods subject to the tariffs on twitter yesterday, which sees the remaining goods imported from China into the US hit by a ‘small’ 10% tariff, in addition to the $250 billion dollars of Chinese products already subject to 25%.
Trump’s reasoned on Twitter that progress towards an agreed trade deal between the two countries had slowed , after ‘China sadly decided to re-negotiate the deal prior to signing’. He went on to say China had not delivered on their agreement to buy large quantities of agricultural products from the US, and haven’t halted the sale of Fentanyl into the US despite President Xi’s assurances.
The new ‘List 4’ tariff includes all apparel, footwear, and manufactured textile products, as well as bike helmets and lights, which previously were not subject to the tariffs in ‘List 3’ on safety grounds. Bike parts and accessories imported under the Harmonised Tariff System (HTS) are also now included, so parts an accessories without a HTS code will be subject to the tariff, which will be 20% starting 1st September due to a pre-existing tax of 10%.
So, how did we get here? Relations initially broke down between the two countries last year, where in March a 25% tariff on Steel was introduced alongside a 10% tariff on aluminium, which raised material costs for US manufacturers. As relations turned sour still, $34 billion of Chinese imports saw altered charges starting July 6th, closely followed by the US bike industry hit by a 25% tariff on Chinese e-bikes in August.
A further $200 billion worth of Chinese goods were hit by a 10% tariff the following month, including an eye-watering $1 billion in bike products. There seemed to be some reprieve in the trade spat towards the end of last year, after Trump and Xi agreed a temporary truce during dinner at a G20 summit in Argentina. The US President agreed to delay an increase to 25% on the aforementioned tariff of $200 billion Chinese goods, however by May relations had once again taken a downward turn and the trade war escalated between the two countries.
With ‘constructive’ talks between the US and China ongoing, this latest round of tariffs is another blow to the US bike industry, which is impacted by some £79 million/$1 billion in bike-related goods. Rick Vosper delves into the figures looking at the financial impact the tariffs are currently having on bicycle retailers across the pond.