Trade War With China Affecting Area Bike Shops

MINNEAPOLIS (WCCO) -- From the casual weekend rider to the commuter who uses their bike every day - the bicycle industry is experiencing rapid innovation and growth.

"For us that's definitely where we're at," says Penn Cycle's Director of Marketing Chris Skogen.

Penn Cycle's Chris Skogen knows that the industry depends on imports. Domestic manufacturing of bicycles and component parts is a fraction of what it once was.

With the exception of the higher-end custom built bikes, the majority of frames and component parts come from China.

"It is uncharted territory. Obviously we don't want to pass costs on to consumers if we don't have to," Skogen said.

President Trump's ammunition in the ongoing trade war is to impose tariffs on foreign-made products.

Beginning Monday, bicycles, parts and accessories from China will be slapped with a 10 percent duty. The dilemma for many retailers is whether to pass that added cost onto consumers, or to absorb the cost on the bottom line.

"We're trying to work hard with vendors to get them to share a little bit of the pain, but so far it's yet to be determined," said Jake Helmbrecht, general manager of Free Wheel Bike.

Helmbrecht adds that the rapidly growing E-bike sector has already experienced some price increases tied to U.S. imposed tariffs. That's because of the electronic and computer components, which were taxed last summer in the first stages of the trade dispute.

"We saw price increases on GPS and computer stuff earlier this summer. You don't know what's going to happen when you open the newspaper. One day your products cost more, it's kind of crazy," Helmbrecht said.

Where this will all lead is anyone's guess. There could be a tariff standoff that leads to negotiating a more fair trade deal between the two economic superpowers.

Bike dealers say in any event, you just might want to purchase that new bike soon. Starting Jan. 1, an additional 15 percent tariff on Chinese made goods will take effect.

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