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Explainer: Sorry, the trade war is not over

Published November 14, 2019

BOULDER, Colo. (BRAIN) — While negotiations are continuing and things can change quickly in the Age of Trump, as of Thursday morning the U.S.-China trade war continues and there is no agreement to roll back tariffs on e-bikes, despite some optimistic reports elsewhere in the bicycle media industrial complex.

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Last week, China officials said they were close to a "Phase 1" agreement with the U.S. that would include an elimination of tariffs the Trump administration has imposed on products, including bikes and e-bikes. It's not clear whether the China statement was an update, a hope or a demand, but officials reiterated it as recently as Thursday morning. 

No agreement has been announced and Trump told reporters last Friday that he will not agree to a complete rollback of tariffs. On Tuesday, Trump said he might increase tariffs substantially if a deal is not reached. 

What about the e-bike exclusion?

In September, the U.S. Trade Representative released a list of products that had been granted an exclusion from tariffs. Singlespeed road bikes were granted an exclusion, as were electric motorcycles.

It wasn't clear whether e-bikes were included with the e-moto exclusion, and the unclarity continues.

"In light of the previous denial of requests for exclusion of e-bikes and the language of the exclusion itself, we are doubtful that this exclusion was intended by the U.S. Trade Representative to apply to e-bikes," PeopleForBikes said at the time, and that position is unchanged.

The organization is hoping to get clarity either from the USTR or via a ruling by the Customs and Border Patrol, said Larry Pizzi, who leads the organization's e-bike committee.

"PeopleForBikes, as our industry association, is pursuing clarity with CBP and the USTR, so all we can say for now is, 'stand by,'" Pizzi told BRAIN on Thursday.

It's possible that some importers have brought in e-bikes without paying the tariff, but if the CBP or USTR eventually rules that e-bikes did not get the exclusion, the importers will then have to pay it back, plus possible interest and penalities. 

What about the discounts?

Some e-bike brands, including Rad Power and Juiced, have announced Black Friday discounts, which some interpret as evidence the brands have received tariff relief, although the brands' promotions do not mention tariffs.

The discounts, in fact, are just what they appear to be: Black Friday promotions. A Rad Power representative told BRAIN the company has not received clarity about the exclusion and is waiting for news from the Trump administration like the rest of us.

Other exclusion news

Besides the exclusions granted to singlespeed road bikes, the USTR also has granted exclusions to carbon frames valued under $600 and some wired bike speedometer/cycle computers.

This week, the USTR indicated it was taking seriously two more exclusion requests.

The office has advanced requests from Priority Outdoor Products and Bantam Digital, the parent company of Big Shot Bikes, to "Stage 3," the third of four stages before an exclusion is granted.

Big Shot requested an exclusion for its singlespeed fixie-style bikes, which appear similar to the kinds of bikes previously excluded at State Bicycle's request, although Big Shot imports its bikes under a different Harmonized Tariff Schedule code than State.

Priority requested exclusion for its aluminum framed "city cruisers" with Gates belt drivetrains.

The Priority request is unusual in that it includes letters of support from some of its suppliers (Gates and Enviolo), customers, and its congressional representative, Rep. Fred Keller of New York.

Priority said it has 41 employees, including 25 in its New York-based headquarters and sales center, and 16 jobs in its Montgomery, Pennsylvania, warehouse and operations center.

Priority's docket at the USTR is even more unusual in that it contains a back-and-forth exchange between Priority and Zakary Pashak, the owner Detroit Bikes, a competitor. Pashak suggested that, rather than removing tariffs on complete bikes, as Priority requested, the USTR should remove tariffs on components, which would aid bike assemblers like Detroit.

"There are many places in the United States that can assemble bicycles, and they do not need to come from China already completely assembled. This exclusion (requested by Priority) would make it financially impossible to do any domestic assembly because costs for components would be higher than costs for complete bikes," Pashak wrote.

Priority responded that Detroit did not make aluminum frames and did not make frames with tolerances tight enough for belt drivetrains. Priority also said Detroit did not have the ability to supply it with short turnaround orders in small quantities, which it said was key to its business model.

The USTR has received 94 requests for exclusions for bicycle products for the List 3 tariff round, imposed in September 2018 on $200 billlion worth of Chinese imports. So far it has received one exclusion request from List 4A, which was imposed in September 2019. That request is from 6D Helmets for its 6D ATB-1 BMX/Downhill helmet. The window for filing exclusion requests for items on List 4A opened Oct. 31 and closes Jan. 31.

E-bikes and e-bike motors were on List 2, and the USTR has denied several requests for exclusions, from brands including Rad Power and organizations including PeopleForBikes. 

Rad Power is promoting discounts, but not because of any tariff news.
Topics associated with this article: Tariffs, Electric bike

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