Bikes in the Age of Tariffs

[Aushiker]

An interesting discussion of the impact of US traffic on bicycle manufacturing by Jan Heine. Also interesting to see where components are predominately made currently.

Read more at https://www.renehersecycles.com/bikes-in-the-age-of-tariffs/

 

[harryS]

How about the big picture, where after a tariff induced recession, the consumer hasn't enough money to proritize a bicycle, which is not a necessity but mainly recreational in the USA. After Covid went dormant, tens of thousands of bikes purchased in 2020 must sit unused in storage. Probably quite a few ebikes too.

 

[jabberwocky]

Things are gonna go from bad to worse for the bike industry. A lot of industries, really, but our little corner of the economy is not in a good position to absorb a massive tax increase. Bike companies don't run on huge margins and are already suffering a collapse in demand. A chaotic economy with lots of uncertainty coupled to increased costs isn't going to help that.

Bicycle Retailer had an article on where assembled bikes come from:

Where the US gets its bikes, and the new tariffs on those nations

(BRAIN) — The U.S. imports most of its bikes, along with e-bikes, bike parts and frames and accessories. The new reciprocal tariffs announced by the Trump administration Wednesday apply to all of the above and more. We thought we'd take a quick look at the top nations supplying complete bikes to...

www.bicycleretailer.com

 

[JimFMB]

An interesting discussion of the impact of US traffic on bicycle manufacturing by Jan Heine. Also interesting to see where components are predominately made currently.

Read more at https://www.renehersecycles.com/bikes-in-the-age-of-tariffs/

Thanks for posting the link. It is very informative.

 

[Jeremy McCreary]

No telling where a system as complex as the global economy will settle after a shock of this magnitude. Could well be someplace even less to the liking of Trump's aspiring oligarchs — or someplace no one's even imagined.

Trump’s Tariffs Will Wound Free Trade, but the Blow May Not Be Fatal

Free trade has been so beneficial to so many countries that the world may find a way to live without its biggest player.

www.nytimes.com

Jaguar Land Rover just announced that it's suspending shipments to the US. Don't know if that includes parts. Lots of their cars already on the road here in SoCal.

 

[Stefan Mikes]

What is actually made of the e-bike components in the United States? I think even SRAM is manufacturing overseas?

From my viewpoint, nothing changes for the EU as the e-bikes or components I would buy are not made in the United States. Except the Mirrycle mirrors Does Redshift manufacture in the U.S.? And well... Wahoo GPS computers are made in Taiwan even if Wahoo is an American company.

 

[Aushiker]

Another related impact is being reported at Bikepacking.com

As reported in the Colorado Sun yesterday, Oveja Negra had to lay off seven employees, which shows that even small brands that make their gear in the United States with US-made materials aren’t immune to this perfect storm of tariffs, reduced consumer spending, and global price tensions…

Further details at https://bikepacking.com/news/oveja-negra-colorado-sun-story/

 

[6zfshdb]

If this tariff turmoil keeps hitting my portfolio like it has been lately, I may be selling my e-bikes to buy food!

 

[jabberwocky]

Another related impact is being reported at Bikepacking.com

Further details at https://bikepacking.com/news/oveja-negra-colorado-sun-story/

That sucks. They make good bags. Its really hard for small companies to absorb sudden cost increases or drops in demand. We will probably be seeing a lot of this in the coming weeks and months.

 

[Chargeride]

l

No telling where a system as complex as the global economy will settle after a shock of this magnitude. Could well be someplace even less to the liking of Trump's aspiring oligarchs — or someplace no one's even imagined.

Trump’s Tariffs Will Wound Free Trade, but the Blow May Not Be Fatal

Free trade has been so beneficial to so many countries that the world may find a way to live without its biggest player.

www.nytimes.com

Jaguar Land Rover just announced that it's suspending shipments to the US. Don't know if that includes parts. Lots of their cars already on the road here in SoCal.

They park thousands of them just down the road from me at the docks, I'll take a picture and see if any move.
They also strangely send hundreds of complete intact tail and rudder assemblies for large planes, all wrapped in yellow plastic.

 

[Aushiker]

Yet another discussion on the impact of tariffs, this time from the Sea Otter Classic, including the decision by SILCA to not sell its new electronic pumps in the USA.

That all said, these tariffs are already doing damage in the bike world. Just today, SILCA announced that they won’t launch their new electronic pump in the U.S., citing tariffs as making the market “impossible.

You can read the full article at Bikepacking.com

 

[Rás Cnoic]

What is actually made of the e-bike components in the United States? I think even SRAM is manufacturing overseas?

From my viewpoint, nothing changes for the EU as the e-bikes or components I would buy are not made in the United States. Except the Mirrycle mirrors Does Redshift manufacture in the U.S.? And well... Wahoo GPS computers are made in Taiwan even if Wahoo is an American company.

It's not that simple. For instance Sony have said the US market is so important to them they will be increasing prices for Europe and Rest of World customers so that American prices don't have to go up too high and lose them US business. So we in Europe will be paying more for products because of Trump's tariff decision despite us not being in the US! If more companies follow this (and I bet they will) then prices will go up everywhere. And I imagine companies will increase prices sneakily anyway as it will be expected so they can get away with it, because like with Gas and electric providers making huge profits from 'necessary' price increases in the post covid/Russian invasion world where they put up the prices just because they can. $$$$$$$$$$$$$$

 

[Stefan Mikes]

So you say Sony and others would like to take the cost of U.S. tariffs?

 

[jabberwocky]

I posted it in the other thread, but good article from the board game industry on tariff effects. Board games are informative because the industry seems well positioned to take the earliest hit. Reading the board games reddit lately has felt like browsing the obituaries. Lots of companies canceling projects, laying people off or just straight up going under.

Tariffs: Rolling Dice Against American Game Publishers

www.catalystgamelabs.com

Independent PC hardware channel Gamers Nexus recently put up a long (3 hours!) video where they talked to multiple companies in the PC hardware world about effects and how they are handling things. A few companies actually opened books and discussed what various tariff percentages do to their margins and pricing.

 

[Rás Cnoic]

So you say Sony and others would like to take the cost of U.S. tariffs?

Sony hikes PlayStation 5 prices by 25% in UK, Europe and Australia

Sony's decision to hike prices in other markets such as Europe and Australia could be an attempt to protect its key US market from price increases.

www.euronews.com

 

[jabberwocky]

Sony hikes PlayStation 5 prices by 25% in UK, Europe and Australia

Sony's decision to hike prices in other markets such as Europe and Australia could be an attempt to protect its key US market from price increases.

www.euronews.com

Yeah. It makes sense for a company like Sony; the US is a huge market, so if you can just increase prices everywhere to hold your market share in the US it might be the best way to keep profits roughly the same and set yourself up longer term.

No company is going to sell at a loss forever though. Nobody knows how long the stupidity will last so theres a lot of guessing and hedging at the moment.

 

[Rás Cnoic]

Yeah. It makes sense for a company like Sony; the US is a huge market, so if you can just increase prices everywhere to hold your market share in the US it might be the best way to keep profits roughly the same and set yourself up longer term.

No company is going to sell at a loss forever though. Nobody knows how long the stupidity will last so theres a lot of guessing and hedging at the moment.

Good point, the big international companies can ride this for a while but long term is still uncertain. Smaller companies as usual will really take the hit. And we all end up paying extra wherever we are.

 

[jabberwocky]

Good point, the big international companies can ride this for a while but long term is still uncertain. Smaller companies as usual will really take the hit. And we all end up paying extra wherever we are.

Yeah. One thing from the gamers nexus video I posted went into that I hadn't thought about is that the tariffs are straight increases to production costs. AKA new costs companies have to pay up front before they even have something in their warehouse they can sell. So imagine you're a small company working on getting a product to market. You've spent time and money on tooling, production and shipping and you thought you were finally at the point you could start selling your product and making your money back and suddenly are being told you have to spend more than your entire production costs in taxes when your container finally hits port... well, smaller companies very likely don't have the cash on hand to pay it.

The sonys of the world aren't going to go out of business if they suddenly have to eat hundreds of thousands of dollars per container in taxes. It will just hit their profit margins and they'll have to figure out pricing going forward. But if you're a small company whose savings are tied up in that container... yeesh.

 

[Stefan Mikes]

Y'all assume it is the foreign manufacturer to absorb the cost of the tariffs. But it is the U.S. consumer.

 

[PedalUma]

It is not worth it for heartland farmers to plant. Their market has evaporated.