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Some bike tariffs to be reduced, many still in place after Trump signs Phase 1 deal

Published January 15, 2020

Editor's note: This story is updated and corrected to show that the List 4A tariff reduction is not contained in the agreement signed Wednesday.

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WASHINGTON (BRAIN) — President Donald Trump on Wednesday signed a Phase 1 trade agreement with China and said he will reduce recently imposed tariffs on some products from 15% to 7.5%. The tariffs that the Trump administration put on most other bike-related products remains at 25%. 

Separately, the administration has recently granted tariff exclusions for most kids bikes and for e-bikes, reducing those tariffs back to where they were before Trump took office and allowing companies to request refunds for the additional tariffs they've paid. Previous exclusions were granted to smaller product categories, including adult singlespeed road bikes and wired cycle computers.

The Phase 1 agreement calls for China to buy an extra $200 billion in products and services from the U.S. over the next two years and agree to provisions protecting U.S. intellectual property. According to the White House, China has "agreed to end its practice of forcing foreign companies to transfer their technology to Chinese companies in order to gain market access." China also pledged to curtail currency manipulation and the U.S. has already removed the country from its list of currency manipulators.

The Phase 1 agreement does not address Chinese government support for manufacturers and it does not remove most of the tariffs imposed by the administration, which remain at historically high levels.

The agreement does not include tariff reductions but Trump said during the signing ceremony that the U.S. will reduce existing tariffs on List 4A from 15% to 7.5%. The lowered tariff is expected to take effect Feb. 14. 

List 4a products include bike helmets, lights, and many miscellaneous bike components and accessories. Those tariffs took effect in September 2019.

Trump also has indefinitely delayed tariffs on List 4b products, which include balance bikes, apparel and footwear. The List 4b tariff was to have taken affect last month at 15%.

However:

  • Other than the exclusions granted recently, the 25% List 3 tariffs remain in place. List 3 includes most categories of non-motorized bikes, as well as many components and accessories.
  • List 2, which includes e-bikes and e-bike motors, remains in place at 25%, but e-bikes were recently granted an exclusion.
  • List 1, which includes GPS bike computers and bearings, remains in place at 25%, although U.S. brands that were having GPS computers made in China have already switched production to other countries.
  • A 25% tariff on steel imports and 10% tariff on aluminum imports remains in place, except for imports from Canada and Mexico. 

In his remarks at the signing ceremony Wednesday, Trump said he left the tariffs in place as a bargaining tool with China. He also misspoke about the size of the List 4A tariff, which is currently 15%, not 10%.

"We’re leaving tariffs on, which people are shocked, but it’s great," Trump said. "But I will agree to take those tariffs off, if we are able to do phase two. In other words, we’re negotiating with the tariffs. We have 25 percent on $250 billion worth of goods. And then we’re bringing the 10 percent down to 7.5 percent on $300 billion worth of goods plus.

"So — but I’m leaving them on, because otherwise we have no cards to negotiate with."

White House photo of Trump signing the agreement Wednesday.
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Topics associated with this article: Tariffs

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