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E-bike industry testifies against proposed tariffs

Published July 26, 2018

WASHINGTON (BRAIN) — Two members of the U.S. e-bike industry testified Wednesday in opposition to the Trump adminstration's proposed 25 percent tariff on e-bikes from China.

The representatives argued that the tariff would harm U.S. businesses and consumers and would not protect any U.S. manufacturers, because there are none. 

"While the proposed tariff has the potential to hurt the jobs that our industry supports in areas such as engineering, marketing and sales, it is also unlikely to have any positive effect on domestic manufacturing," Bob Burns testified. Burns is a vice president and general counsel for Trek Bicycle, and testified on behalf of PeopleForBikes and the Bicycle Product Suppliers Association. Burns is a board member at both organizations.

"Across the U.S. bicycle industry, virtually 100 percent of the electric-assist bicycles sold in the U.S. are manufactured overseas," Burns said. "And, 100 percent of the motors used in these products are manufactured overseas. Simply put, there is no domestic manufacturing footprint protected by the proposed 25 percent tariff, which is the intended use of tariffs. The U.S. bicycle industry is investing in engineering, research and development, and marketing to continue to provide our customers with a better and more affordable product. A 25 percent tariff on the import of electric-assist bicycles will hinder this investment and result in the loss of these jobs. A 25 percent tariff on imported motors for electric bicycles will discourage the industry from efforts to assembly these products in the U.S."

E-bikes and e-bike motors were included on a list of 284 product categories that would be subject to the tariff, announced in June. The $16 billion in products on the list would be added to the goods that have been receiving the tariffs since July 6, reaching the total of $50 billion in Chinese imports that President Donald Trump said should be subject to the 25 percent tariff. Trump has since then proposed another list, of $200 billion in Chinese goods, that would be subject to a 10 percent duty. Many bike products are on that list.

A decision on the e-bike tariffs is expected in two to three months.

Besides Burns, Don DiConstanzo, the founder and CEO of Pedego, also testified. Daniel Harman, the vice president of the Bird electric scooter brand, testified too. Electric scooters are imported under the same tariff code as e-bikes. 

DiConstanzo pointed out that U.S. e-bike companies have few options to source their bikes and motors.

"Pedego’s business is reliant on imports because no companies manufacture electric bicycles in the United States," he said.

"Pedego does not have the option to effectively build all of its electric bikes in the United States because virtually all of the components used on bicycles are unavailable or in short supply in our country. While there are a couple of other countries that can build electric bicycles, they would still have to source the components from China and the capacity is limited in the other countries. And whatever capacity is available, it (would) be swallowed up by the advent of a tariff of 189 percent proposed in Europe."

DiConstanzo, Burns and Harman were joined by 89 others who testified against the proposed tariffs at the U.S. International Trade Commission. The witnesses included manufacturers of semiconductors, vaping devices, tractors, medical equipment and more products on the list. Trade groups including the National Retail Federation, the Steel Manufacturers Association and the American Petroleum Institute also testified. 

The prepared remarks from DiConstanzo and Burns are attached below. 

PeopleForBikes is planning a half-hour webinar for Friday for industry members to educate themselves about the proposed tariffs. 

Topics associated with this article: Tariffs, Electric bike

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