neiloxford
Active member
I was going to buy the new Trek Rail but I am keen to avoid US brands.
April 2025 USA Tariff's - Impact on bike/part prices
- Thread starter Zimmerframe
- Start date
Tom Sellers
Member
tariff arbitrage via transshipment, and it’s quite common in the bike parts world (especially with Shimano, SRAM, etc.).
To be legal, this technique relies on "de minimis" rules still applying to the buyer in the USA. However the generous $800 de minimis allowance for the USA is ending soon.
When that happens, a Shimano part is still an item made in Japan and subject to the tariff rate on Japanese goods. You can expect to see grey-market work arounds on offer from mom and pop sellers in places like Canada and Mexico, which will have lower tariff rates than Japan.
One example may work like this:
- Seller in Canada buys $30.00 Shimano brake lever from Ali Express.
- seller removes retail packaging
- seller represents items as "seconds", "bulk", "warranty replacement", etc.
- seller does not misrepresent origin of goods, but reduces resale price of item to $15.00, but charges $35.00 for shipping
- buyer ends up paying tariffs of 10% on $15.00
Of course, CBP has the authority to re-assess the value of any items. So, in reality, given that millions of small packages arrive every day in the USA from offshore sellers, and apparently there are looming staff shortages at the CBP, what are the chances that your shipment will get caught in this net and therefore re-assessed? Even if you purchase direct from sellers like Ali Express, I wonder in practice how many of these shipments will actually get interdicted?
Until then, like the advice that is commonly applied to investing, "only invest what you can afford to lose". Back to the example: If I were ordering brake levers via the above example from Canada or Mexico, I'd buy as many parts as I needed in one shipment. But if from Ali Express, Bangood, Temu, etc., I'd buy one at a time and play the odds.
To be legal, this technique relies on "de minimis" rules still applying to the buyer in the USA. However the generous $800 de minimis allowance for the USA is ending soon.
When that happens, a Shimano part is still an item made in Japan and subject to the tariff rate on Japanese goods. You can expect to see grey-market work arounds on offer from mom and pop sellers in places like Canada and Mexico, which will have lower tariff rates than Japan.
One example may work like this:
- Seller in Canada buys $30.00 Shimano brake lever from Ali Express.
- seller removes retail packaging
- seller represents items as "seconds", "bulk", "warranty replacement", etc.
- seller does not misrepresent origin of goods, but reduces resale price of item to $15.00, but charges $35.00 for shipping
- buyer ends up paying tariffs of 10% on $15.00
Of course, CBP has the authority to re-assess the value of any items. So, in reality, given that millions of small packages arrive every day in the USA from offshore sellers, and apparently there are looming staff shortages at the CBP, what are the chances that your shipment will get caught in this net and therefore re-assessed? Even if you purchase direct from sellers like Ali Express, I wonder in practice how many of these shipments will actually get interdicted?
Until then, like the advice that is commonly applied to investing, "only invest what you can afford to lose". Back to the example: If I were ordering brake levers via the above example from Canada or Mexico, I'd buy as many parts as I needed in one shipment. But if from Ali Express, Bangood, Temu, etc., I'd buy one at a time and play the odds.
Ridgydidge
Member
Given China’s tit for tat tariff response, it’s going to be hard for the orange Manchurian candidate to get out of the corner he’s backed himself into.
Liz Truss 2.0?
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offroad
Active member
Hello America and greetings from downunder '10%' Australia. Your beer cans and bike frames are about to be more expensive using Australian manufactured aluminium, made by..... American owned Alcoa.
Priceless !
P.S. Do we get our $5 billion deposit back when we cancel the $368 BILLION submarine order ?
Priceless !
P.S. Do we get our $5 billion deposit back when we cancel the $368 BILLION submarine order ?
Tom Sellers
Member
USA imports most of its Aluminum from Canada, followed by UAE, China, Mexico and Argentina. But as Alcoa has three major smelters in Canada (also one in Australia), as you mention, it seems probable that the price increase for the items that use the alu such as bike frames, if they are cast in the USA, stand to go up by at least 10%.
Amber Valley Guy
Well-known member
Is that a white line on the bonnet?
I actually thought that a silver lining of this situation is the potential "business opportunity" for our Canadian friends.
They can bootleg bike parts to the USA just as their forefathers did with whisky a hundred years ago. I believe some of the old trails are still existing, simply fill your rucksack with parts and bike over.
"Psst, wanna buy a derailleur, eh?"
Disclaimer: This post is meant to be humouress, and not an advocation of breaking any laws.
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- Thread starter
- #68
You could avoid Trek but any half decent MTB will be covered in US components. You could go with Tektro, Ohlins & Sun Race for example but not many bikes will come from factory specced that way. This is the thing with global supply chain stuff, it's so embedded across the industry that pretty much anything decent will have American componentry, it's just another point of folly in slapping tariffs around indiscriminately.
Really !! Pokemon Go again@zim If only the world could go back to 2016
All true. Though I think it's possible to find something decent with Shimano drivetrain and brakes, limiting the US brand parts to forks and shocks.
The bike firm usually has the largest markup, so avoiding US bike brands could still be a way of registering one's disapproval of the current situation, if one so chooses.
Seems very unlikely. Setting up a factory is going to take years and the tariffs are unlikely to last that long and are pretty much guaranteed to change before it would pay for itself.Thing is Shimano own companies in the USA . Who's to say they won't ship some manufacturing there
sethimus
😠 Donald Duck 😠
they didn't even increase production when the covid boom happened, why would they move here instead?Thing is Shimano own companies in the USA . Who's to say they won't ship some manufacturing there
neiloxford
Active member
Shimano licence manufacturing out to smaller companies. Its why there's GREY Market goods out there. No packaging, no warranty but cheap . When the licence runs out .
How could they have increase production ? They were effected buy everything like every other manufacturer was.
Logistics, lack of materials. Forced closures
mike_kelly
E*POWAH Elite
Like now?
MountainBoy
Active member
Do you have any idea how little of the price of an EMTB is raw materials? If the aluminum in the frame goes up by 10%, that would amount to less than a dollar or so on the cost of a bike. Do you want to see the math?
Ridgydidge
Member
Taiwan’s stock market took a leap today with the tariff ‘pause’ - back to ‘just’ 10%. Apart from boutique brands, many mainstream brands’ bikes are fabbed there?
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Why would you move your manufacturing to America when tomorrow the tariffs might halve, evaporate, treble, sprout wings, or turn into a vibe? No one can answer the question when all we have is a persistent level of entirely foreseeable chaos.
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many have worked on the basis the tariffs set by Trump would remain but dozens of countries have already approached the US for trade deal talks...one report I saw mentioned over 50. Now in light of that Trump has given a 90 day pause presumably to give those discussions time to come to an agreement. So the situation is fluid. The only major "sticker" is China so it will be interesting to see what happens there. What we have witnessed so far is a fundamental attack on globalisation by the biggest consumer market in the world ( the US) and there are many other countries who may ultimately benefit from its demise by growing onshore manufacturing and rebuilding the job market in that sector of individual economies.
So any assessment the impact on the bike market is premature. The game has only just begun!!
So any assessment the impact on the bike market is premature. The game has only just begun!!
MountainBoy
Active member
It's not an attack on globalism, as much as it's an attack on globalism that is rigged in everybody's favor but our own.
We just need rules that are fair and equitable.
Joecrow
Active member
And like the UK have been told the 25% on aluminium, steel, cars and the 10% for everything else is not going to change regardless if trading with the USA is in equity or even deficit!
I like the idea* that the tariffs have been paused so the (checks notes) very small US Government can attempt to handle 50 simultaneous conversations & not at all that the bond markets gave DJT a Lizz Truss shaped existential kick in the slats.
*Obvious lie.
All of which is tangential to the discussion, the China - US tariffs remain & that will heavily affect bikes originating from China which is not insignificant. China manufactures more bikes than any other nation but Taiwan exports more & Taiwan is on the 90 day list at 10%.
*Obvious lie.
All of which is tangential to the discussion, the China - US tariffs remain & that will heavily affect bikes originating from China which is not insignificant. China manufactures more bikes than any other nation but Taiwan exports more & Taiwan is on the 90 day list at 10%.
As an example of how expensive products can be in the US, the CEO of the Norwegian company Sweet Protection was interviewed and said an popular bike helmet they produced in China today costing $300 would cost $500 if they were to manage to keep the margins. To move the production of another low-cost country would be extremely expensive and part of that cost would be passed on to the buyers so whatever happens the helmet would increase significant in price.
Ridgydidge
Member
Indeed, the tariff drives a ‘wedge’ between the supply cost and the demand price (the so called ‘willingness to pay’), so the price will rise by only a proportion of the tariff impost in most cases (goods with a 100% tariff say often end up costing 50% more).
But it depends on the ‘elasticity’ of demand (ie. how responsive the quantity demanded is to price) - for fully inelastic demands (think dentists’ bikes - where price is no object), the tariff impost can get passed on 100%.
Gee I am glad I am not an American.
It’s the biggest one day tax impost on little people consumers in history, while that sackful of bricks laughs about his oligarch mates making millions out of the stock market gyrations.
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