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China-made GPS units will be hit with 25% tariff starting next month

Published June 19, 2018
The Stages Dash

WASHINGTON (BRAIN) — China-made bicycle GPS units are expected to see a significant price increase in the coming months due to a 25 percent tariff imposed by the Trump adminstration.

On Friday, the administration released two lists of China-made products subject to the tariff. Tariffs on the first list, of $34 billion in goods, will go into effect July 6. Cycling GPS units are on that list. The second list, of $16 billion in goods, will be subject to a public review before being enacted. E-bikes are on that list (see separate story).

The dominant brand in GPS, Garmin, manufactures in Taiwan, so its product will not receive the tariff. Lezyne and Bryton also manufacture in Taiwan.

Stages Cycling and Wahoo Fitness, however, have their GPS units made in China. A Stages executive is expecting his products to be slapped with the tariff starting July 6. Wahoo declined to comment for this story.

Bernie Doering, Stages Cycling's senior vice president of sales and marketing, said the tariff would have a major effect on sales of the company's Dash GPS head unit.

"We are looking at moving production of the new models out of China, but we still have a significant amount of inventory that is in process and nothing we can do about it," Doering told BRAIN.

The Dash retails for $299.

The Stages Dash is brought in under the Harmonized Tariff Code 8526.91.00, described as "Radio navigational aid apparatus, other than radar."

It's not clear whether any other GPS-equipped fitness products might be affected; it depends on which Harmonized Tariff Schedule (HTS) is used to import the product, and that can sometimes be open to interpretation.

In the past, the 8526.91.00 code has been used to import Recon Jet smart glasses and goggles (now off the market). Non-GPS bike computers are brought in under a different code that was not on the list released Friday.

Some other products that contain a GPS, such as Fitbits and the Apple Watch, also are brought in under different HTS codes (the Apple Watch, in any case, is made in Taiwan, and Fitbits are made in Singapore).

The code, and the new tariff, does apply to some non-fitness devices such as GPS-enabled luggage and vehicle trackers. In the first quarter of this year, the U.S. imported goods worth $131 million from China under the code.

The list of 818 Harmonized Tariff Schedules released Friday does not appear to contain any other products directly related to the bicycle market. Also, retaliatory tariffs on U.S. products, enacted by the EU, China and other countries, do not appear to include any bike products.

Prior to this, GPS units from China were subject to no import duties.

The price bump at retail could be significant in a competitive market. An industry rule of thumb is that an increase in cost at the dock is multiplied three times at retail. Varying distribution models, margins and exchange rates can affect that, of course, but the rule of thumb would mean a product valued at $100 at the dock, hit with a $25 tariff, would see a retail price increase of $75, perhaps moving the price from $300 to $375.

 

Topics associated with this article: Trade/tariffs

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