April 2025 USA Tariff's - Impact on bike/part prices

mike_kelly said:
You have to remember that even tho SRAM and Trek and Spesh are American companies like Apple they don't make anything. All their stuff is made in Asia by contractors. Even America niche custom builder have to buy parts from Asia.
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So, the bikes & components that they import from their Asian factories will mean high tariffs to their US market. But when they ship directly to the end market, Europe for example, they will incur no greater tariff than they do now. The tariff increases will only harm the USA market. In the short term at least.
What Specialized (for example) could do is to shift some manufacture from one or more of their Asian suppliers back to the USA (known as reshoring). That will use more expensive American labour, and not have the same economies of scale, but may overall be cheaper for the US market. But it will all take time and Tump may be gone by then, or have changed his mind! With such a seemingly illogical and volatile character, it is very hard to forecast what should be the sensible action to take. Who would be the management of those companies? But hey, that's what they get the big bucks for!
 
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I may be taking a simplistic view but why wouldn't an American bike brand who currently imports goods direct from china/vietnam buy through an intermediary in a country(with a lower goods tariff) who imports it tariff free and then sells on to America?
 
I would say the tariffs are very bad news for US bike makers. Not only will they be paying considerably more for their foreign (particularly Chinesse) made components but they are likely to be subject to reciprical tariffs in their world wide markets. The result, I suspect, is that the current USA assembled bikes will be both more expensive in the home market and uncompetitively priced elswhere. It may well be that some brands will take advantage of what will become a protected home market for US produced bikes and set up full manufacturing facilities along the lines, apparently, hoped for by the new administration. Protectionism though, is a two edged sword when there is no competition to drive innovation and quality improvements you end up making things like the East German Trabant!
 
ZR1 said:
I may be taking a simplistic view but why wouldn't an American bike brand who currently imports goods direct from china/vietnam buy through an intermediary in a country(with a lower goods tariff) who imports it tariff free and then sells on to America?
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Product could travel anywhere in the world, but in the end if the product origin is from a tariffed country, USA importer will have to pay it.

The USA are bleeding their own companies and bringing back manufacturing short term is impossible and even if they would manage to do it would cost billions over 10-15 years+.
 
I sell commercial trucks. We are still awaiting our next wave of tariff surcharges as we already took a nice hit. Just to be clear, an American assembled semi-truck, still has many many foreign parts.

It's ignorant to think that (just a made up example as all the parts on these trucks come from everywhere) Cummins is going to relocate their block casting plant, which would cost 100s of millions to do, when: 1) it won't be any cheaper than just paying the tariffs as American workers/ real estate/ health insurance/ housing/ etc. just costs way more as do new factories, 2) A POTUS that is very fickle and can change his mind back tomorrow and post it on X at 3am tonight, 3) If the POTUS doesn't manage to seize control of the government, he will be gone in 3.75 years and therefore the tariffs will be gone, 4) Congress very well might block the tariffs, since the ability to tax is an authority that legally is only for Congress to exercise.

Our suppliers have told us clearly that they are just going to add the tariffs and go about selling the same product. Americans just received the largest Tax increase in history, and the lower down the economic ladder you are, the higher the percent of your income this will represent.

I've been selling semi-trucks since Bill Clinton was in office and one thing that is very clear from not only personal experiences, but actual statistics going back a century, every measure of the economy is always better under Democratic presidential leadership, than Republican leadership. GDP, unemployment, national debts, tax receipts, etc. Seven of the last 9 Recessions occurred when Republicans had the Executive branch. This will be 8 of 10 in 6 months. Heck there are even less abortions under democratic leadership, because lower income women have more support and better finances.

I'm going through a very contentious divorce. I will probably be out of my home for about 1 year before I get my home back. My wife unfortunately is no longer well and is unable to make sound decisions. She's actually self-destructing and it's pretty sad to watch. I 100% predicted the stock market drop as a result of Putin's GF's policies and requested to move all of our market investments from high growth stocks to bond funds. My wife had the judge make it where I was unable to do this. I have lost a 6-figure amount of money in the last month as a result of this.

Trump's speed was impressive. Usually, Republican policies take 2-3 years to have a significant effect and cause lower economic output. Trump did it in about 90 days. He's truly an impressive Cult of Personality. What's interesting to me, is how a man born so rich, with opportunity, good looks & the gift of gab always thinks he is the victim, and he is now extended this entire line of thinking to swaths of the American voting public. Here we are with economic numbers that are the envy of the entire world, but apparently, we are getting a 'raw' deal. What a strange train of thought.

If there is a silver lining to the worldwide financial collapse caused directly by Trump's policies, it is this: The USA is very quickly heading towards an Authoritarian regime headed by the Trump dynasty. If Trump remained quite popular, he would obtain this. The guardrails are off. The courts and the Legislative branch have made it clear that they are not interested in protecting the rule of law, as long as their guy is the King. The only thing that could possibly stop this is the Republicans getting wiped out in Congressional elections and the next presidential election.
 
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Bikes and parts will be more expensive in the USA.

In Europe, some USA bikes may become more expensive, though there's a least one USA brand I know of that has an assembly factory in the EU which wouldn't be effected. Whether there'll be a popular boycott of USA brands (in general) remains to be seen.
 
Yep to all that ^^^ America just did a Brexit. FYI, if things carry on as they have the past couple of days, you're about a week from being told the stock market is woke. :ROFLMAO:
 
The major flaw that nobody talks about is that Americans are used to buying inexpensive goods from Asia. If any companies were to actually build new factories in the US they would be producing goods that would have to be priced much higher. So even if some of the companies re-shore the goods are still going to be much more expensive.
The only way to be competitive in the US would be to automate and that would eliminate any benefit of re-shoring to US workers. A lose-lose any way you look at it.
 
As far as I understand tarrif's, at the end it's always the consumer that feels them the most, I think that for parts a year or so no major change will happen as the industry players have presigned contracts and parts bought in bulk for some time ahead.

From the emtb market view I would say Trump with this for everyone basically boosted the stagnant used ebike market and shut the door to the new ebike market in the future.
 
emtbeast said:
the industry players have presigned contracts and parts bought in bulk for some time ahead.
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I thought most industries worked on a just-in-time system these days.

Also, supply contacts don't immunise against changes in domestic taxes, such as import tarrifs.
 
DieBoy said:
I thought most industries worked on a just-in-time system these days.

Also, supply contacts don't immunise against changes in domestic taxes, such as import tarrifs.
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Don't know, just conversation here, I think if they buy parts in bulk the buy them at a certain price that stands at the time of purchase. That is why I think it's going to take a while to feel the effects of tariffs.

A different story is for import of fully built bikes...there the tariffs definitely apply.
 
emtbeast said:
Don't know, just conversation here, I think if they buy parts in bulk the buy them at a certain price that stands at the time of purchase
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The price you pay to the supplying *company* remains the same due to the contract. The money you pay to the *government* for the import tax changes.
 
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Anecdotally, I've heards of lots of US busineses stuffing their warehouses full of stock in the wake of the election for the express purpose of ducking import tariffs as long as possible.
 
emtbeast said:
I think if they buy parts in bulk the buy them at a certain price that stands at the time of purchase.
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The price paid for parts may well be fixed, but the tariff is applied on import, so the effect will be almost immediate.
 
ZR1 said:
I may be taking a simplistic view but why wouldn't an American bike brand who currently imports goods direct from china/vietnam buy through an intermediary in a country(with a lower goods tariff) who imports it tariff free and then sells on to America?
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You mean like the UK? (10%). :ROFLMAO:

But I suspect that they may be able to find somewhere in the Pacific Ocean that has a low tariff, to avoid the shipping costs. :)
Bu these days, cargoes are sold en-route to different owners and sent to different destinations (oil for example). I wonder how much steel is being diverted from India and China to the UK and Europe? So why not bikes? No need for an intermediate country! :unsure:
 
ZR1 said:
I may be taking a simplistic view but why wouldn't an American bike brand who currently imports goods direct from china/vietnam buy through an intermediary in a country(with a lower goods tariff) who imports it tariff free and then sells on to America?
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Tariff calculations take account of this avoidance 'wheeze'.
 
Some may be underestimating the ability of corporate organisation to deal with change. Change is after all a constant in the business world. Those businesses would indeed be very poor if they have not already set out strategies to deal with this latest development, given Trumps intentions have been widely known for at least a year. So for companies wanting to sell into the huge US market they have already weighed their future strategies, will know their options, and already decided which to pursue both in the short term and beyond. They may in the short term decide to invest in expanding their market share in regions outside the US, whilst consider onshoring in the medium term...if the US market is that important to them.

Yamaha look to have been ahead of the game withdrawing from the US and instead invested in buying Brose in the EU!!

Remember the original incentive to offshore ( mostly to the far east) manufacture, was supposedly driven by the cheap labour markets in China etc. That together with vastly increased shipping costs has long since ceased to be the case. The recent pandemic also demonstrated the fragility of being overly dependant on offshored production.

Trade tariffs are the main incentive for reciprocal trade deals but such deals largely consist of specific industries that are important to each party of the deal. This is where our specific interest may suffer since bikes sales are likely to be very minor compared to for example, the automotive industry or raw materials (aluminium/steel etc).

So my reading of these tariff changes is the certainly in the short term the main price increase issues will sadly be for our US riders and their LBS..............at least until and unless the far east countries seek a trade deal with the US, which could for example include guaranteed purchase of US goods into those countries to help balance the trade deficit. I do not see why supplies of Fox, SRAM etc components imported into the UK or Europe need be impacted.
 
Unless the whole world economy crashes because the orange child is playing with matches.
 
Mikerb said:
Some may be underestimating the ability of corporate organisation to deal with change. Change is after all a constant in the business world. Those businesses would indeed be very poor if they have not already set out strategies to deal with this latest development,
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The strategy of most companies from what I've gathered is simply to pay the higher tarrifs and pass that additional cost on to the consumer.

Aside from the wisdom of the idea of industrial autarky in the 21st Century, factories take years and lots of money to build. The skilled workers to staff a factory don't fall out of a tree either. If you still need to import the raw materials (e.g. aluminium) that are still subject to tarrifs, it may still not be viable.

What businesses like is predictability and stability. There's no guarantee that the US import tarrif for country X will be the same next week, let alone in 5 years.

From what I can tell, the new tarrifs aren't just a purely economic plan but also an attempt to coerce other country's domestic policies, in the case of Europe: food quality standards, digital privacy and protection, and bizarrely VAT.

As others have mentioned, it's the normal person who will suffer.
 
Being optimistic, my hope is that Trump will realise what a massive error these tariffs are before they do too much damage. If he can "pause" them based on concessions from other countries then he can still spin them as a massive success.
My main concern is Taiwan (as that is where all our parts are made), TSMC already won an exemption so all those semi-conductors will be tariff free regardless. Taking Taiwan as a whole, once you remove the trade deficit due to semi-conductors you really don't have that much left (Bikes are small fry) so hopefully Taiwan will pledge to buy a lot of extra US made military equipment (to keep China at bay) and Taiwan will get dropped back to 10% or lower.

Slightly surprised how everyone leaves Myanmar off these lists. Quite a few carbon frames made there now (despite supposed sanctions) yet they got a slightly lower rate than Vietnam and Cambodia (other carbon frame making hot-spots).
 
mike_kelly said:
You have to remember that even tho SRAM and Trek and Spesh are American companies like Apple they don't make anything. All their stuff is made in Asia by contractors. Even America niche custom builder have to buy parts from Asia.
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My relatively simplistic analysis says, all major bikes which are built from components & frames made in Taiwan and Japan etc will increase in price in US, as those tariff hikes will be too large for the already hard pressed retail market to absorb.

Plus, given most big brands typically commit to significant forward order positions to derive the lowest purchase prices, that may give them a headache. Solution:? Divert/Ship part of planned US supply to elsewhere eg Europe.

Consequence: over supply in Europe equals lower European prices ( but still better margin for manufacturer).

so, maybe this is wishful thinking, but my reaction is US tariff hikes equals potentially lower European prices - at least in the near term. Longer term the market will adjust.

Smarter economists- wheres the flaw in my analysis?
 
This global machine that is the world economy has taken decades to create. It is delicate. Shipping things worldwide depending on demand so that you don't have to stock goods. The supply chain where is car is built from parts outsourced all over the world and assembled somewhere else. Etc etc.
As covid showed if you shutdown/break the machine it is very very hard to get it started again. Too many dependencies that all have to be met for it to work.
If the computer chips that run new cars are not available from the one plant in china that makes them, all the new cars sit waiting for the chips.
If humpty dumpty takes a great fall all the kings horses and all the kings men can't put humpty together again..
 
Living in Northern Ireland I'm not much fussed about the tariffs.
As we're supposedly got the best of everything ( must have missed that )
But we did have 😉 for a bit.

Screenshot_20250405_192236_Google.jpg
 
RustyMTB said:
Renault engines. They'd be tariifed to death now.
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Yeah, but you compensate by working out a drugs deal to off set things...

Did you know the F40 wheel bearings are also Renault items .... save yourself a few pennies there .. or could before Trumiffs
 
A thing sbout DeLorean is the whole thing was intended to unite rather than divide. It was set up to employ people from either side of bitterly divided communities in the midst of the lowest point of Northern Ireland's troubles & it worked. Point is you can use trade as a force for good, it has the power to do that. These guys though, not grasping that so much.
 
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