Bicycle Retailer

Bicycle Retailer Latest News and Information

22 August 2019

  • Updated tariff timeline: How we got here
    UPDATED Aug. 14, 2019

    BOULDER, Colo. (BRAIN) — Tariff news is piling up on the industry, making heads swirl from Washington to Long Beach to Boulder.

    To help you, and us, keep track, we have prepared a timeline, below. We suspect we'll have to keep updating the timeline as things develop. If you have a question, shoot it over to BRAIN’s Steve Frothingham at Sfrothingham@bicycleretailer.com or leave a comment.

    Editor's note: We've corrected our reference to the import duty on bikes during the Kennedy administration. The correct figure is 30%, not 50% as we had said. Thanks to James Longhurst, Ph.D., an associate professor in the history department at the University of Wisconsin La Crosse for nicely pointing out our mistake. 

    Pre-existing tariffs

    During the Kennedy administration the import duty on bikes was 30%. But in recent years most complete bikes have been subject to an 11% tariff; the rate for most road bikes is half that. Before the new Section 301 tariff imposed last year (see below), e-bikes had no tariff.

    All the new and proposed tariffs in the news in the last year are in addition to the pre-existing tariffs.

    Parts and accessories are generally subject to tariffs between 0% and 10%. The tariff on pedals, for example, is 8%, while that on pumps is 3.7%. 

    All the new and proposed tariffs in the news in the last year are in addition to the pre-existing tariffs. So for example the new 25% tariff on Chinese bikes, made official this month, is on top of the 11% tariff most bikes already are subject to, for a total of 36%.

    Many missed the news last September, but there was a tariff reduction that month. President Donald Trump signed the Miscellaneous Tariff Bill Act of 2018, which reduced some of these underlying tariffs (in imports from all countries, not just China) without affecting the new Section 301 or Section 232 tariffs. For example, the bill lowered the rate on disc brakes from 10% to 7.5%, and the rate for unicycles went from 3.7% to 0%. It also slightly reduced the tariffs on some cycling shoes. There's more on the MTB on the PeopleForBikes website.

    New and proposed tariffs, in chronological order:


    The U.S. tariff on steel and aluminum

    Applies to: U.S. imports of raw steel and aluminum from most countries
    Rate: 25% on steel, 10% aluminum
    Date proposed: March 8, 2018
    Date applied: March 23, 2018
    Type of tariff: Section 232, related to national security. (There's more on Section 232 tariffs on the Department of Commerce site)

    Annual import value of products, 2018: $40 billion
    Notable exclusions: Steel from Argentina, Australia, Brazil, and South Korea (Argentina, Brazil and South Korea are limited by import quotas); aluminum from Argentina and Australia (Argentina limited by quota). Under NAFTA, Canadian and Mexican materials were exempt until May 31, 2018.
    Impact on our industry: Many U.S. manufacturers tell BRAIN that material costs — even for U.S. made steel and aluminum - have increased significantly. This put them at a disadvantage relative to foreign manufacturers, because only the materials, not completed products, are subject to this tariff. Some U.S. manufacturers favored an increase in tariffs on completed products because it helped reduce that disparity. 
    Status: Mexico and Canada continue to negotiate new trade agreements in hopes of eliminating the tariffs; with a Canada/US deal announced on May 17. The EU and the U.S. also continue to negotiate on this and other trade issues.
    Retaliation: Canada, Mexico, and the European Union each enacted retaliatory measures.

    Section 301, List 1 (GPS and bearings)

    Applies to: U.S. imports of a wide array of Chinese products, including GPS bike computers and ball bearings
    Rate: 25%
    Previous tariffs: GPS: 0%; Bearings: 4-10% depending on type.
    Date proposed: April 6, 2018
    Date enacted: July 6, 2018
    Type of tariff: Section 301 (More on Section 301 on the USTR website)
    Annual import value of all List 1 products, 2018: List 1 represented $34 billion in imports, out of an original proposal of $50 billion. List 2 (below) made up the $16 billion difference.

    Impact on our industry: Caused some GPS makers to move production out of China, usually to Taiwan. Raised costs of U.S.-made components that include Chinese-made bearings, and replacement bearings. Caused some bearing suppliers to move production or assembly out of China.
    Retaliation: China announced its own list of U.S. goods subject to new tariffs.
    Status: Still in place.

    Section 301, List 2 (Chinese e-bikes and motors)

    Applies to: An array of Chinese products, including e-bikes and e-bike motors.
    Tariff rate: 25%
    Previous tariff on e-bikes: 0%
    Type of tariff: Section 301
    Annual import value of all List 2 products, 2018: $16 billion
    Date proposed: June 20, 2018
    Date applied: Aug. 23, 2018

    Impact on our industry: Several manufacturers, including Trek and Pedego, testified against the proposal in Washington. The tariff had more effect on lower-priced e-bikes sold online and other channels. Sales statistics show the e-bike remained the fastest growing segment in the industry, despite the tariffs.
    Retaliation: China announced a second round of U.S. goods subject to retaliatory tariffs.
    Status: Still in place. Bike trade groups and brands requested exemptions, but the USTR denied those requests in January.

    Section 301, List 3 (Chinese bikes, parts and accessories)

    Applies to: Wide array of Chinese products, including most complete bikes and bike parts and accessories, plus other items the bike industry uses and sells, like tools and water bottles. 
    Notable exceptions: Helmets and lights were exempted for safety reasons. Cycling apparel and shoes also are not included. A variety of bike parts and accessories that are not elsewhere specified or included in the HTS import codes (NESOI, in importer jargon) fall under the 8714.99.8000 code. That code was NOT included in this round, but items under that code are subject to a pre-existing 10% duty. This includes about 40 types of products, including pump clips, bike radios and horns, kickstands, wide-angle reflectors, seatposts, toe clips, spoke reflectors and more. HTS 8714.99.8000 is included in List 4 (see below).
    Tariff rate: 10% starting September 2018, was set to increase to 25% on Jan. 1, 2019, but the increase was delayed. Now set to increase to 25% on imports that arrive after June 1.
    Previous tariffs: The 10% and 25% tariffs are in addition to existing tariffs on bike products, discussed above.
    Type of tariff: Section 301
    Annual import value of all products on List 3, 2018: $200 billion.
    Date proposed: July 17, 2018
    Date applied: 10% took effect Sept. 24, 2018. It increased to 25% on May 10, 2019, applying to imports that arrive after June 1.

    Despite the notable exceptions, this is a big, wide ranging list of bike stuff.

    Impact on our industry: Despite the notable exceptions mentioned above, this is a big, wide ranging list of bike stuff. Evidence: In 2018 the bike industry imported at least $1.1 billion in products on this list from China, representing half the industry’s imports. Since September, the 10% tariff has led to wholesale price increases of around 5% on these products, retailers said. Suppliers tell us efforts to re-source products and the uncertainty has been costly. The increase to 25% is expected to cause significant wholesale and retail price increases.
    Retaliation: China is running out of U.S. imports to hit with new tariffs in response. After the U.S.’s 10% increase in September, China announced new tariffs of 5-10% on $60 billion in U.S. exports to the country, including agriculture products and natural gas. After the announced increase to 25% in May, China said it would increase tariffs on $60 billion in other U.S. imports on June 1.
    Status: Negotiations continue.

    List 4 — (Almost everything else from China)

    Applies to: U.S. imports of Chinese goods, including most or all of the bike products not included in List 2 or List 3.
    Tariff rate: up to 25%
    Type of tariff: Section 301
    Annual import value of all products on List 4, 2018: $300 billion.
    Date proposed: May 13, 2019
    Date to be enacted: Any time after June 24 in any amount up to 25%, on top of the regular rate of duty.

    Impact on our industry: Adds in most or all bike-related items that were not in List 3, including lights, helmets, unspecified parts and accessories, apparel and footwear. The industry is planning to submit requests to exclude bicycle products from this round of tariffs.
    Status: A public hearing was held June 17 at which the bicycle industry was represented. On June 29, at the G20 summit in Japan, Trump said he and Chinese President Xi had agreed to a truce and that the U.S. would not impose the new tariff on List 4. On August 1, Trump said Xi had not followed through in promises made in June and said List 4 would be hit with a 10% tariff on Sept. 1

    Status update Aug. 13, 2019: Trump announced that some products on List 4 will get a holiday shopping season reprieve and not get hit with the new tariff until Dec. 15. That included cell phones, laptops — and balance bikes. However, all other bike products on List 4 were set to still receive the 10% tariff on Sept. 1. That included helmets and lights, which were exempt from previous rounds for safety reasons. 
     

    The EU list

    Applies to: U.S. imports of products from the European Union, including some bike products.
    Tariff rate: Up to 100%
    Type of tariff: Section 301
    Annual import value of all products, 2018: $11.5 billion
    Date proposed: April 8, 2019
    Public hearing: May 15-16, 2019

    Impact on our industry: Applies to imports of EU parts, including sprockets and hubs.
    Retaliation: The EU has proposed retaliation that would include some sprockets and hubs from the U.S.
    Status: Matt Moore, representing the BPSA, was scheduled to speak at a public hearing about this proposal on Thursday, May 16. Comments are being accepted until May 28 at regulations.gov/docket?D=USTR-2019-0003.

  • Emerald cancels November Outdoor Retailer show

    SAN JUAN CAPISTRANO, Calif. (BRAIN) — Emerald Expositions has canceled its Outdoor Retailer Winter Market show, which had been planned for early November in Denver, and which was to have included a bicycle trade area.

    Emerald said it will return Outdoor Retailer to a two-show annual format, combining the Winter Market with January's Outdoor + Snow Show, also in Denver. Then it will hold its OR Summer Market show in June 2020 in Denver. It's more or less the same schedule that OR had two years ago, before it split the winter show into two events.

    "We’re taking it back to 2018 …" wrote Marisa Nicholson, OR's senior vice president, said in an email to the industry Wednesday afternoon. 

    "We made this decision in partnership with the Outdoor Industry Association (OIA) and after consultation with key brands and retailers through personal conversations, our advisory boards and surveys.

    "And we are excited! While we believe that the winter season deserves a true launch event, for winter businesses, the priority is to bring outdoor and snow brands and buyers together in one place. And the overwhelming sentiment is for that event to be in January," Nicholson wrote.

    Emerald announced last fall that it was canceling its Interbike show, which was last held in Reno, Nevada, in September 2018. It later announced it would include bike exhibits in the November OR event, but bike industry response to that proposal was muted, at best. Emerald said bike companies are welcome to exhibit at either of next year's shows.

    "Bike brands and dealers can explore options for exhibiting and/or attending Outdoor + Snow Show and Summer Market. Manufacturers and brands have previously indicated that timing on the two shows may fit their product cycles," the company said.

    Companies that had already committed to exhibiting at the November show can receive a full refund or apply any payments toward the costs of one of next year's shows, the company said. 

    The Outdoor + Snow Show will be held Jan. 29-31, 2020, at Denver's Colorado Convention Center. Emerald has a contract tol hold its OR events there through 2022. 

  • This week's podcast guest: Steve Matous, the new president of NICA
    Matous discusses NICA's success in introducing mountain biking to thousands of teenager and developing lifelong cyclists and outdoor enthusiasts.

    DURANGO, Colo. (BRAIN) — Steve Matous, who became president of the National Interscholastic Cycling Association in May, is the latest guest on the Channel Mastery podcast, presented by BRAIN and Verde Marketing and hosted by Verde's Kristin Carpenter.

    Matous is the former director of Outward Bound. 

    NICA "is growing like mad," Carpenter said, "with more communities asking for a 'league' (aka a 'chapter') than NICA has the resources to serve. Every nonprofit (and heck... every commercial business) wants to see growth like NICA is experiencing. How are they doing it?"

    Carpenter answers the question in her discussion with Matous. Besides managing the growth, she said NICA has set objective and subjective strategies toward increasing inclusivity and gender equity, as well as providing tools for underserved and non-affluent communities.

    "NICA is leveling the playing field for every kid who wants to be involved," she said. 

    Show notes and a podcast player are available on the Channel Mastery website

    Or you can subscribe or download the episode via most popular podcast apps (including iTunesGooglePlay, and Stitcher). 

    Have questions or ideas for Kristin and the Channel Mastery podcast? Email: podcast@channelmastery.com.

  • Toby Hill named editor-in-chief of Cycle Volta

    IRVINE, Calif. (BRAIN) — Former BRAIN managing editor Toby Hill has been named the first editor-in-chief of Cycle Volta, an e-bike and electric two-wheel mobility website operated by publisher Bonnier Motorcycle Group. Hill started in his new role Monday.

    Prior to Hill's 7 1⁄2 years with BRAIN, he worked as a writer and editor at outlets including daily metro newspaper The Orange County Register, entertainment trade publications The Hollywood Reporter and Back Stage magazine, and B2B publisher Crain Communications. Hill holds a degree in journalism from California State University, Fullerton.

    "I'm thrilled to continue working in the industry I love — especially a part of the industry that is growing so rapidly," Hill said. "I've seen firsthand how e-bikes can not only bring new participants into two-wheel mobility and reduce the number of daily car trips, but can also help cycling enthusiasts pursue adventures they never thought possible and extend their time in the saddle. And the technological development has been amazing. It's such an exciting time for the market."

    Hill reports to Mark Hoyer, the organization's vice president and editorial director in its Irvine office. "We're delighted to welcome Toby to lead cyclevolta.com as we cover this exciting segment of two-wheeled transportation," Hoyer said. "His wealth of experience in the bicycle industry and a strong reporting background are huge assets as we build the editorial product to help consumers and enthusiasts understand and shop for e-bikes and related gear."

  • Shapleigh leaves MIPS board, plans to join an industry company

    STOCKHOLM (BRAIN) — Helmet industry veteran Greg Shapleigh is leaving the board of MIPS and says he will assume "a key position" in the industry.

    Shapleigh has spent most of his career connected to the Giro brand, but left Vista Outdoor, Giro's current owner, in 2017 to join MIPS as a strategic adviser. Shapleigh's consulting contract with MIPS expired in June and he recently told the company he would step down from the board because of a potential conflict of interest with his new position in the industry. 

    “Greg has, since he joined the Board of Directors of MIPS in 2018, been instrumental in providing important insights from the helmet industries and we thank him for his contribution and wish him all the best in his new challenge,” said Magnus Welander, the chairman of MIPS. 

  • Amer (Enve's owner) applies for Nasdaq delisting after buyout

    HELSINKI (BRAIN) — Amer Sports Corporation, the former owner of Mavic and current owner of Enve Composites and other brands, has asked for its stock to be delisted from the Nasdaq Helsinki stock exchange. Mascot Bidco Oy, a group led by Chinese sports brand Anta, has acquired all shares of Amer in a buyout that was initiated last September

    Besides Enve, Amer Sports' brands include Salomon, Arc'teryx, Peak Performance, Atomic, Suunto, Wilson, Louisville Slugger and Precor. It sold Mavic to Regent, a California investment firm, in July. This month, Regent also bought Redline, Diamondback and IZIP from the Dutch conglomerate Accell Group. 

  • Rad Power, Woom and Pedego make Inc. 5000 list

    NEW YORK (BRAIN) — Three bike industry brands — two of them in the e-bike market and the other in the youth bike space — have made Inc. magazine's annual list of the 5,000 fastest growing private companies.

    Rad Power, a consumer-direct e-bike brand based in Seattle, is ranked 63rd on the list. The company said its sales were $44.6 million last year, and has shown growth of 4,442% in the last three years. “This is an exciting milestone and a testament to our talented team and passionate community of owners,” said Mike Radenbaugh, founder and CEO of the company. “We started out wanting to build e-bikes, and are now building a company that’s helping to change the way people and businesses move.”

    Next on the list was Woom bikes, the Austin, Texas, company that distributes the youth bikes in the U.S. Woom bikes are designed in Austria; the U.S. company said sales were $7.2 million last year, up 1,666% over three years. The company is 259th on the Inc. list.

    Woom and Rad Power appear on the list for the first time this year.

    Pedego, which has more than 120 licensed retailers selling its e-bikes, made the list for the sixth time. This time the California company is 3,393rd on the list. The company said sales were $20.1 million last year, up 105% over the last three years. 

    The list is featured in the September issue of Inc., available on news stands on Aug. 20. More information: inc.com.

  • Altor's newest lock designed to resist portable angle grinders

    STERLING, Va. (BRAIN) — With battery-powered grinders becoming a favorite tool among bike thieves, Altor Locks has developed its own cutting-edge technology.

    Its newest lock, the SAF, is 80mm in diameter and weighs 13.7 pounds. The semi-hollow alloy material is designed and advertised to resist portable angle grinders, preventing the blade from breaching the core hardened steel locking structure.

    Altor tested the SAF against three of Popular Mechanics' top angle grinders. All three failed within four to six minutes because of one or more of the following: battery dying, overheating or broken grinder disc.

    "The impetus for design was the repeated requests we got in our inbox to build something to defend against angle grinders," said Jon Akers, head of Altor Locks sales and marketing. "Angle grinders are the most common tool used by thieves today in major cities."

    The SAF Lock features a vinyl and silicone outer coating to protect against scuffing. Not intended to be a portable, the lock's heavyweight construction is designed to provide overnight security.

    "This is a very different target market for us," Akers said. "We have been a lightweight lock company for years and now make a lock nearly the weight of a chain lock. Our target market is for people who live in cities and leave their bike locked up outside their house. The SAF Lock was designed to stay put, to be left either at home or work, where you lock your bike up for prolong periods."

    Altor Locks, which began selling lightweight titanium locks three years ago through Kickstarter, offers the SAF through Indiegogo for $199. It will be available at that price for the next 27 days. Then the lock will retail for $299.

  • Five years after launch, 7Mesh is showing it’s more than a jacket brand
    "Filling the parking spots."

    SQUAMISH, British Columbia (BRAIN) — 7Mesh was founded by a crew with years of experience in the technical outdoor apparel market, so a technical cycling rain jacket was a natural centerpiece of its first seasons.

    But its founders always had bigger plans for the brand.

    “There was a risk that would be perceived as the jacket company,” co-founder and CEO Tyler Jordan told BRAIN. “We knew we knew how to make good outerwear and that we had a lot to learn about what goes on underneath. So we consciously decided to risk being pigeonholed.” 

    Five years after launch, the company is filling out its product line for 2020 with a complete array of shorts and jerseys for men and women.

    “It’s a pretty substantial increase in SKUs,” Jordan said. “Five new shorts for men, five for women, a new hoodie. It’s a big expansion, and now the pieces fill all the spots in the parking lot. Not that we won’t expand more, but all the spots are filled now.”

    The line includes road, gravel and mountain bike clothes, including thermal pieces, jackets, vests, over shorts, liners and tights. 

    Gravel and mountain bike items include 7Mesh’s “Anything System,” a modular storage system that includes as many as five “floating” rear pockets on jerseys, and a variety of pockets on liner bibs and overshorts. 

    Jordan started his career at the outdoor brand Arc’teryx when its only product was a climbing harness. He went on to lead the brand as CEO for eight years. Arc’teryx, now owned by Amer Group, is today one of the best known outdoor apparel brands in the world. His two co-founders at 7Mesh also are former Arc’teryx executives.

    Arc’teryx’s outerwear technologies and styling have influenced that market for over a decade. Jordan and his partners were confident they could do something similar in the cycling market. 

    “Arc’teryx drove a lot trends in lamination technologies, zippers, weight mitigation with lighter fabrics … The way we put together apparel influenced multiple industries. You can see it in tactical wear, ski and snowboarding, and hunting and fishing.”

    Cycling, however, was later to the game.

    “We felt cycling was lagging behind. It’s less true now, but cycling apparel had stayed very traditional for a long time. We decided that we could do something that added value. We didn’t come here to make the same product as everyone else.”

    7Mesh sells online through its own website, but a majority of sales are through brick-and-mortar retailers. 

    “It’s easier to show people great apparel in person than to tell them about it on a computer screen,” he said. 

    A version of this story appeared in the August issue of BRAIN. 

  • SockGuy offers design supporting Yellow Umbrella movement in Hong Kong

    CARLSBAD, Calif. (BRAIN) — SockGuy's summer "promo" sock supports the Yellow Umbrella movement in Hong Kong.

    "It is getting more than serious today and hopefully there will not be a repeat of Tiananmen Square. Cooler heads need to prevail for all involved," said Michael Foley, the company's president. 

    "No matter how much the bike industry loathes Trump, the U.S. (and the rest of the world) needs to do something about China and their outright theft of U.S. intellectual property for the last 40+ years... Not to mention their insane disregard for the rule of international law and human rights," he added.

    SockGuy has previously offered a sock to support Students for a Free Tibet

    More information: sockguy.com.