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Bike products escape new EU tariffs imposed in aircraft dispute

Published October 3, 2019
Hubs and cassettes were on the original list, but testimony from industry apparently led to their removal.

BLOOMINGTON, Minn. (BRAIN) — The industry escaped another potential tariff threat — this time on European hubs and cassettes — likely thanks to testimony in Washington from Matt Moore, QBP's counsel and chair of the legal and legislative committee for the Bicycle Product Suppliers Association.

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The Trump administration on Wednesday released a final list of EU products subject to a 25% tariff related to a long-running dispute over government support for commercial aircraft makers. A preliminary list of products released in April included aluminum hubs, three-speed hubs, and cassettes. But the bike products were not on the list released this week.

Moore testified against the tariff at Section 301 Committee hearing in May. He testified that products from Campagnolo and DT Swiss would be among those affected if the tariff were imposed. He testified that the tariffs would be ineffective in achieving the Section 301 goals because the bike products are made in countries that, while in the EU, are not involved in the aircraft dispute. 

Moore also testified that if imposed the tariffs would serve to shift U.S. sales of the effected products to e-commerce businesses such as the Wiggle, which is based in the U.K., a country that is involved in the dispute.

"The online seller Wiggle has grown to be a $500 million company, and its primaryemphasis is selling components direct to consumers online, consumers in the United States," Moore told the committee, which includes representatives from the U.S. Trade Representative, the Department of Treasury, State Department, Agriculture Department, Commerce Department, the Department of Homeland Security, and the Small Business Administration. 

 

"These consumers and Wiggle pay no duty, no state or local  sales taxes, no income taxes, because most of their sales are under $800, the de minimis amount that has been set by the United States government.

"If it's more expensive for importers to import through traditional channels in quantity and pay amount of additional duty, those sales will drop off, and their sales will again go precisely to the place that we're trying to sanction, the  United Kingdom. 

"In addition, the sales will impact 43 jobs at DT Swiss in Colorado, where they make those hubs into bicycle wheels. We have 17 wheel builders in Minnesota that use hubs to create bicycle wheels, over 100,000 wheels last year.

"In summary, we cannot survive another round of tariffs. In the alternative, if you must  impose a tariff on Chapter 8714, make it a  reasonable one of no more than 10 percent," Moore concluded.

Topics associated with this article: Tariffs, Distributor news

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