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Huffy CEO says US missed its chance to protect domestic bike manufacturing

Published August 20, 2018
Trump administration's protectionist actions come "20 years too late," Bill Smith plans to tell the USTR. He also plans to speak out in defense of IBDs.

DAYTON, Ohio (BRAIN) — If the Trump administration is imposing tariffs on Chinese bikes in an effort to protect domestic bike manufacturing, Huffy's CEO says that ship has sailed.

"The assumption the proposed 25 percent tariff provides competitive relief to a domestic industry is 20 years too late," Bill Smith plans to tell the U.S. Trade Representive and other members of the Section 301 Committee later this week, according to planned remarks he submitted to the USTR on Aug. 10. 

Smith pointed out that Huffy and fellow domestic bike markers Roadmaster and Murray had petitioned the USTR 20 years ago for relief from aggressive pricing from Chinese importers.

"Our request was denied on the grounds that the administration was not going to interfere in developing economic relations with China due to problems with the bicycle industry. The failure to support our request subsequently resulted in Huffy closing three domestic bicycle plants and the termination of over 2,000 employees. Roadmaster and Murray suffered the same fate; factories closed, employees were laid off. And bicycle production in the U.S. largely ceased. Today over 95% of all bicycles sold in the U.S. are imported," Smith said.

"This proposed tariff is too little too late. The tariff solves no problems. It only creates problems. Huffy imports over 4 million bicycles a year from China. There is no other country in Asia or Europe that can provide the volume Huffy requires as China is the largest bicycle producer in the world. There is no domestic parts infrastructure to protect as most bicycle components are also produced in China," he said.

Smith also plans to argue that the bike industry is not in need of protection from intellectual property theft in China. "The bicycle industry, and in particular the mass market segment in which Huffy competes, is a low technology, high volume, high value segment. There are very few patents and very few if any Intellectual Property issues between American bicycle brands and China bicycle producers. There are none at all to my knowledge. The imposition of a 25% tariff under the guise of Intellectual Property protection or punishment is a fallacy as no such issue is present in the bicycle industry."

Smith plans to say the proposed tariffs are a significant threat to Huffy and the rest of the bike industry.

"The proposed tariff will have a devastating impact on bicycle sales as consumer demand will plummet. MORE IMPORTANTLY, it will devastate the American bicycle industry across all segments disproportionately impacting 4,000 independent bicycle dealers whose very livelihood depends on the sale of bicycles," he wrote in his prepared remarks. 

Smith will speak at public hearings on Thursday. He will be in the same group as Arnold Kamler, the CEO and chairman of Kent International; Patrick Seidler, the president of Wilderness Trail Bikes; and Bob Burns of Trek Bicycle. 

Other industry members spoke Monday morning in Washington as part of a testifying group before the committee. The proposed tariffs would add a 25 percent duty on complete bikes, frames, wheels, and other parts and accessories from China, including helmets, bike racks, and other items. The new tariffs would be on top of existing tariffs on some items, including tariffs of up to 11 percent on some complete bikes. 

Topics associated with this article: Trade/tariffs

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