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Bikes in the age of tariffs

renehersecycles.com

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Re: Bikes in the age of tariffs

#101

Post by insane_dreamer »

davidw wrote: post #42
osigurdson wrote: post #36

At least for high end mountain bikes, carbon frames are mostly made in Taiwan, not China.

Maybe everyone will start buying from https://argonautcycles.com/ - right?

Considering their bikes start at $15K, "everyone" is unlikely to be able to afford it.

I love to buy local, and I love to cycle, but what I can afford is $2K. Which is why I'm still riding the same Kestrel (full carbon w/ SRAM Force drivetrain) I got on Craigslist 8 years ago for $700, and on which I've since replaced a number of components, but have still spent < $2K overall. A comparable bike new these days would be at least $5K.

Re: Bikes in the age of tariffs

#102

Post by insane_dreamer »

An excellent summary that applies to many other small industries. Too bad the Trump Administration economists didn't read this article before coming up with their tariffs plan (of course considering its stupidity, especially in how the tariffs were calculated, it's plausible no actual economists were involved).

Re: Bikes in the age of tariffs

#103

Post by insane_dreamer »

sandworm101 wrote: post #2

>> Our rulers seem to think that the U.S. imports more than it exports, so the net effect will be positive. It is eye opening to see people so casually speak of American "rulers". Not politicians. Not business leaders. Rulers. That's new.

It's in keeping with the times. Trump wants to be king.

Re: Bikes in the age of tariffs

#104

Post by insane_dreamer »

rstarast wrote: post #11

With the huge differences in per-country tariff, there seems to be a large incentive to reroute and relabel imports. E.g., build a bike frame in China, export it to a sister company in Japan, and export it to the US from there, claiming production in Japan. How effective are existing controls against that? (And what are they even, I'm ignorant.)

There are import/export costs that make such routing impractical other than for smaller volume, high cost items.

The other thing is that customers buying high end items care about where it was made, so you need to inform them. (Passing off the bikes as being manufactured in Japan but in fact the frame was made in China, would be a big blunder.)

Re: Bikes in the age of tariffs

#105

Post by alkonaut »

tourmalinetaco wrote: post #92
alkonaut wrote: post #51

Earlier quoted context omitted.

It's astonishning that we are discussing a price hike of asian made mass-market products (effectively your entire Amazon or Wal-Mart inventory from floor to ceiling) of 10% or more, and that's "just 10-13%" now? As if that alone wouldn't be felt more than the 2008 financial crisis in the pockets of Americans.

The problem is less that we’ll feel a 10% or even 15% price hike on foreign goods, but that we are so reliant on foreign manufacturing to begin with.

Why is that a problem? For some critical goods (Food, Medicines, Defense) it's a security risk to not have a supply. But for flip flops and umbrellas, no country is somehow better off by having thousands of factories, instead of doing what the US does: selling high value goods and services and importing the low value goods.

In fact, it's the opposite. Those industries are much more polluting per dollar GDP created, and that externality is something you are happy to not have on your own soil.

Re: Bikes in the age of tariffs

#106

Post by theshrike79 »

OtherShrezzing wrote: post #27
whenc wrote: post #18

Earlier quoted context omitted.

https://en.wikipedia.org/wiki/Rules_of_origin

It's trivial to get around these rules. Northern Irelnd is (or was at some point) a country of origin for both the EU and the UK. So a company could produce something in Greece, ship it to Dublin within the EU, then truck it to Belfast in Northern Ireland, and export it to the US with a UK certificate of origin.

Pretty much every single Aliexpress purchase I've made has been shipped from the Netherlands for years now.

They use it to get around EU customs and tariffs, dunno how but it works.

Re: Bikes in the age of tariffs

#107

Post by metalman »

mmooss wrote: post #67
metalman wrote: post #35

the article ends with a FUD statement about certain products bieng no longer financialy viable in the world market due to them bieng priced out of the US, and insuficient demand, elsewhere. This can only be accepted if there is no question about the obscene profits generated by all large manufacturers, where "not financisly viable" means double digit profit and growth, rather than actualy unprofitable. If there is re…

The point is that there are products for which there is not enough of domestic market for domestic small manufacturers. There is enough market worldwide for those manufacturers. > Globalisation, only works for the biggest players and sharpers That's just not true. Many small businesses sell their products worldwide via online marketplaces. Have you downloaded software from another country? Bought something on Alibaba…

Missreading my emphasis.....Globisation ....I thought....refered to the creaping take over of "multinational" corporations consolodating whole industrys under one companys rule....locking out small businesses...like mine so ending the competion that realy boils down to makeing it easyer for BTB to buy from the giant multi national, but use my(and other) small businesses just to get that 3'rd quote, with no intent to purchase from me, is a good thing The supposed efficiencies in "economys of scale" are false, and wink wink, refer to the efficiency of extracting profits from a captured market, rather that the localisation of economys, which actualy stregthen comunitys. Problem with trump, is that, some of what he is doing, resonates strongly with actual local comunities, and the possitive effects there, could be quick and profound.Underestimating this, is a big mistake, if you are opposed to his other, shall we say......initiatives.

Re: Bikes in the age of tariffs

#108

Post by yzydserd »

hx8 wrote: post #87
yzydserd wrote: post #23

Earlier quoted context omitted.

And consumers will pay the $12. It won’t make it viable to make the bike in the US for < $40.

These blanket tariffs are less about protecting/encouraging domestic manufacturing and more about renegotiating trade. At this current framing ("reciprocal tariffs") there is an implication that they are short term. The negotiations with Canada and Mexico demonstrate a tic-for-tat game theory in effect. Without introducing the tariffs as a long term position businesses will be less inclined to do the capital expendit…

While the framing has been reciprocal tariffs, the WH has published the formula and it’s essentially based on reciprocal trade surpluses, not tariffs. If one country sells more to the US than the US sells back then that’s seen as bad. Even if the other country has no tariff.

Re: Bikes in the age of tariffs

#109

Post by Yoric »

whynotmaybe wrote: post #19

> Let’s do the math: Take a kid’s bike that retails at a big box store for $ 150. Let’s assume that bike costs $ 30 to make. The rest of the cost is shipping to the U.S., warehousing, transport to the store, marketing, admin costs, customer service, warranty, retailer profits, etc. Whether the bike is made in China, Vietnam or Cambodia, the new 34-38% tariffs will increase the cost by ‘only’ $ 10-12. (The old tariffs…

Note two limitations to the maths (I'll admit that I haven't read the OP in detail).

1. That's assuming that shipping, warehousing, transport, etc. do not rely upon foreign imports, including services. Chances are that more than one link in the supply chain will be hit either by the US tariffs or by the actual reciprocal tariffs from the other end [1].

2. That's also assuming that the tariffs will not have an impact on the sales of the company, which might adapt either by decreasing its margin (to increase sales) or by increasing it (either to try and compensate for lost sales or because it feels like the right time to hike prices).

[1] We shouldn't let ourselves be fooled by the word "reciprocal tariffs" used by Donald Trump. All these numbers are bogus. In January, EU tariffs on US goods were about 2-3%, not 39%, just as US tariffs on most EU goods.

Re: Bikes in the age of tariffs

#110

Post by agumonkey »

mmooss wrote: post #14
giraffe_lady wrote: post #4

> That is a factor that’s often overlooked: The Civic Type R—and also many high-end bicycle components—barely make sense from a strict business perspective. ... International trade has made it possible to pool the global demand for such niche products and make them all in one place, achieving economies of scale that make them (almost) cost-effective. This is such an interesting insight that would never have occurred…

Of course there are enormous benefits to globalization: economies of scale, efficiency and lower prices, quality from specialization (wine from France, beer from Germany, etc), increased competition, etc. To think protectionism will benefit the economy is ignorant. The global system of free trade and human rights has been the most free, prosperous, and peaceful era of humanity by far. Whole nations lifted from deep p…

Mostly we're reducing it's spread. Countries don't want to rely on others for a core set of industries. Also culturally I think being good at one or two things is unhealthy. My 2 cents.
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