A CALL FOR UNITY, TARIFF TURMOIL, AND BUY A BIKE NOW!

By Jay Townley

04-01-25: “Brand loyalty on decline amid big shift in shopper behavior.” Chain Store Age CSA: “Fifty-five percent of global consumer respondents report “rising living costs” as a top concern. As consumers grapple with inflation, tariff uncertainty, and a difficult macroeconomic environment, they are prioritizing cost over brand loyalty. The overwhelming majority (77 percent) of consumers are actively changing their purchase behavior in response to price increases, according to EY’s “Future Consumer Index,” which surveyed more than 20,000 consumers across 26 countries. Slightly more than a third (34 percent) no longer consider brands when making purchasing decisions, with 54 percent of respondents only buying branded products when they are on sale. The increasing adoption of private label products is reshaping consumer perception, making store brands the preferred alternative to traditional branded options. 67 percent say private label satisfies their needs just as well as branded products. Thirty percent of respondents say they no longer consider brands at all when making purchasing decisions. “Consumer behavior has historically shifted during economic downturns, but today’s changes appear to be more fundamental,” said Rob Holston, EY global and Americas consumer products sector leader. “Unlike past cycles, where consumers returned to familiar brands post-crisis, prolonged inflation, supply chain disruptions, and geopolitical instability have reshaped habits permanently.” HPS ANALYSIS: The bike shop channel of trade in the U.S. faces both internal and external challenges. Consumer loyalty, or lack of it, and fundamental changes in shopping and buying behavior are right near the top of the list. Today’s consumer is a creation of the pandemic, and shopping is done online via the internet. While a growing number of shoppers have learned through experience, some good, some bad, that they need to visit a brick-and-mortar retail store to see, feel, touch, and experience the product they researched on the internet, some retailers, including a lot of bike shops still haven’t realized this fundamental change and adjusted accordingly. From the owners and managers on down to the sales associates, bike shops need an attitude adjustment, starting with lose the attitude. Everyone that walks in the shop, no matter their gender, age or ethnicity, is a potential buyer and customer for life. They need to be treated accordingly, with respect for the knowledge they have brought with them, and the fact that they represent an opportunity by coming through the door and asking for your expertise and expert help in making their final buying decision. You and your bike shop are the brand they are searching for.

04-02-25: “7 things we noticed at Taipei Cycle 2025.” Cycling Industry News: “Set in the global cycling industry’s hub of Taiwan, Taipei Cycle Show 2025 brings together international trade execs with an eye on trends and the direction of the market. What insights could be gleaned from this year’s edition of the key show? Werner Müller-Schell had boots on the ground again for Cycling Industry News … 1. A Harsh Reality Check for Taiwan’s Bicycle Industry: Shortly before Taipei Cycle Show 2025 kicked off, the Taiwan Bicycle Association released new market data, and the figures are sobering. For the first time in years, Taiwan’s bicycle exports have dipped below the one-million mark, representing a staggering 31.3 percent decline compared to 2023. The e-bike sector, once the crown jewel of the island’s cycling exports, suffered even more: exports plunged by 47 perent. 2. Fewer Visitors, Familiar Faces: While the number of exhibitors slightly increased — 980 companies from 35 countries across 3,600 booths — the visitor turnout told a different story. Compared to 2024, the halls of Nangang Exhibition Centre felt a bit less crowded. Though we’re still waiting for official figures, discussions at the fair indicated a reduction in international staff on-site. 3. Sustainability Takes Centre Stage: Sustainability was everywhere at Taipei Cycle 2025 — not just in product displays, but also in the conversations and forums shaping the event’s narrative. 4. Green Materials and Products on the Rise: From saddles to chains to entire frames — this year’s show offered plenty of proof that sustainable materials are becoming a top priority for bike brands. 5. Premium Road Bikes Still in Demand: While the low- and mid-range markets continue to feel the effects of the global downturn, the premium road bike segment remains resilient. At Taipei Cycle 2025, high-end models were prominently displayed across the halls, 6. Is 32 the New 29? A subtle but intriguing reveal at Taipei Cycle 2025: Formula presented a prototype carbon MTB rim built for 32-inch wheels — a potential new standard for mountain biking. Paired with matching 32-inch tires from Maxxis, this oversized setup hints at future trends in geometry, speed, and performance. 7. A Stronger Call for Unity: In keynote speeches, panel discussions, and casual conversations, one theme kept coming back: collaboration.” HPS ANALYSIS: Taipei Cycle is very much an international trade show, and the Taiwanese bicycle business is a legacy within the global bicycle ecosystem. 50 years ago, there was no “global” bicycle business. There were country markets and country and regional bicycle brands. The buyers, mostly bicycle manufacturers and wholesalers, came for name-brand components, quality parts at the best prices that could be negotiated, and accessories. The first, and in my opinion, the only real “bicycle boom,” from 1970 through 1974, created the global bicycle business and the original equipment manufacturer (OEM), first in Japan, then Taiwan. The Taiwanese soon reached out to Japan and then China. When Europe moved to protect the home industry, the Japanese and Taiwanese invested, and when the U.S. did not protect the home industry, the Taiwanese invested in China to grow their OEM business. The Taiwanese bicycle business has and will continue to invest in the future, and the American bicycle business would be wise to listen carefully to the strong call at this critical time, for unity.

04 02 25: “Trump announces 10 percent tariffs on all imports, additional taxes for some 60 countries.” The Washington Post: “President Donald Trump said Wednesday that he will impose a new 10 percent tariff on all imported goods along with an additional punitive import tax tailored for each of about 60 countries that his advisers say maintain the most unfair barriers against U.S. products. The president’s long-awaited tariff plan is designed to spur a renaissance in domestic manufacturing and to fill government coffers with tax revenue, even as many economists warn that he is steering the U.S. economy toward slower growth and higher prices. ‘In the face of unrelenting economic warfare, the United States can no longer continue with a policy of unilateral economic surrender,’ Trump said during a Rose Garden ceremony before an audience of guests, reporters, and members of his Cabinet. The president’s latest trade initiative represents a breathtaking political gamble. After returning to the White House on a wave of public anger over inflation, Trump is now asking voters to put up with a renewed period of rising prices in return for the distant promise of rebuilding domestic manufacturing. Already, economists are warning that Trump’s tax increase on imported goods will mean sticker shock on some of Americans’ most important purchases, including groceries, cars, and homes.” HPS ANALYSIS: I double checked with the representative from the American bicycle business to the International Trade Commission Industry (ITC) Trade Advisory Committee to make sure my current U.S. import tariff calculation is correct as if April 14, 2025. As you will see reading the articles in this month’s HPS Micromobility Reporter, the import tariff on bicycles and e-bikes entering the U.S. from China will soon be 175.5 percent on road bikes, 181 percent on all other bikes, and 170 percent on e-bikes. This includes Most Favored Nation (MFN) tariffs, Section 301 tariffs, National Security or IEEPA tariffs, and reciprocal tariffs. In 2024 85 percent to 87 percent of all U.S. imports of bicycles originated in China. Over the course of time, over the next three to four months, the total financial cost of U.S. import tariffs on bicycles and e-bikes will seep through the retail pricing to consumers. Unless some action reduces some portion of the total extra cost of the tariffs, sales at retail from all forms of retailing of bicycles and e-bikes will decline and be reduced dramatically. The NBDA has started helping bike shops get ready and make the changes to their businesses required to survive, and the NBDA Retailer Summit in Bentonville, Ark. May 20-22 will generate more tactics and strategies! Find out more by visiting www.nbda.com.

04 03 25:” Where the U.S. gets its bikes, and the new tariffs on those nations.” Bicycle Retailer and Industry News: “The U.S. imports most of its bikes, along with e-bikes, bike parts, frames, and accessories. The new reciprocal tariffs announced by the Trump administration on 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 the U.S., and what the new tariffs on those imports will be after they take effect next week. … As noted in the table, the administration's threatened 25 percent tariffs on products from nations that import oil from Venezuela are not included because the administration has not released details on that program. PeopleForBikes has suggested that tariff could add another 25 percent to imports from China. Complete bicycles are not subject to the new 25 percent steel and aluminum tariffs imposed last month. And products that are subject to the steel and aluminum tariffs (which include bike chains, exercise equipment including stationary bikes and trainers, some cables and locks, and various fasteners and hardware) are exempt from the new reciprocal tariffs. What about other kinds of bike products? Most components and accessories have pre-existing duties in the 0-8 percent range, instead of the 11 percent in the fifth column from the left in the table below. Frames, for example, have a 3.9 percent duty. E-bikes have no duty, so you can substitute a zero in the fifth column above to determine the new total tariffs on e-bikes from various countries.” 

HPS ANALYSIS: Please note that the previous article stated that “85 percent to 87 percent of the bicycles imported into the U.S. in 2024 originated in China. This percentage is based on units. The 40.4 percent in the first line, third column attributable to China is dollar value. Also, the total tariff in the far-right hand column of the table above does not include all of the tariffs that are currently in the final total tariff referenced in the previous article. With this said, the table above does an excellent job of identifying the top five source countries for nonelectric bicycles imported into the U.S. in 2024 totaling 95 percent of total dollar value. 

04 03 25: “Analysis: industry is certainly uncertain, now.” Bicycle Retailer and Industry News: “Wednesday President Donald Trump unveiled the global challenge the industry has been dreading for months. While the industry is still searching for answers to detailed questions about the tariffs' implementation, Trump's Rose Garden announcement made clear that price increases are inevitable. Only inventory that clears ports of entry before April 5 is safe from some level of extra tariff that will increase importers' costs and likely cause price hikes at wholesale and retail. Importers now know that they will be making extra payments, due nearly immediately when the product arrives, that were not part of their long-range planning. That will tighten budgets across the industry, probably reducing spending in more flexible areas like marketing. ‘The biggest problem for us and everyone is the cash flow,’ said Arnold Kamler, the CEO of Kent International. ‘When we buy bicycles and bike parts, we get credit terms of 60-90-120 days, but with high tariffs they get deducted from our checking account automatically; we have an auto debit with U.S. Customs, and I assume most of the big bike companies do,’ he said. ‘It's brutal.’ Some critical details remain unknown across the industry. ‘I think the (industry's) initial reaction will be to wait for more clarity (if any is to be had),’ Matt VanEnkevort, Marin Mountain Bike's CEO, told BRAIN in an email. VanEnkevort said it's too soon to predict the size of price increases. Details are still unknown, and there's always the possibility that Trump will retract the new tariffs. ‘I would think that (the administration's) recent history of announcing and then retracting trade sanctions will make most brands reluctant to jump into price increases, he said. But, he said, ‘If this does actually come into effect, this will increase dealer and consumer pricing substantially. Not going to help bike dealers,’ he said. The broad picture from Wednesday is that all imported goods, from all nations, are receiving an additional 10 percent tariff on top of any pre-existing duties or tariffs. Where certain products from certain countries already had multiple tariffs, such as some st’eel products from China, the new total tariffs due could be approaching 100%.” HPS ANALYSIS: One of the brutal truths that our business has to come to terms with is the fact that our total import FOB value peaked out at approximately $3.5 billion, including e-bikes, in 2022. While the trade association will claim $6 to 8 billion in retail sales, we remain a “small” business, consisting of mostly small businesses that do not make large PAC contributions and cannot afford the K-street lobbying firms and clout that companies like Apple can. The American bicycle business can successfully lobby, I have seen it succeed, but, as the saying goes, “… it takes a village.” We need to organize and reach out to every member of Congress, no matter which party they belong to and tell our story and do what we can to get their support in this case for tariff exceptions and legislation that provides the financial incentives required for meaningful investments in U.S. bicycle, e-bike, and component manufacturing.

04 04 25: “Bike maker takes steps to avert an unexpected million-dollar tariff charge.” Bicycle Retailer and Industry News: “Taiwan-based Tern Bicycles’ U.S. office will be on the hook for about $1 million in unexpected tariff fees if shipments that are currently in transit don’t clear customs before next Wednesday. Until Wednesday this week, e-bikes from Vietnam were subject to no tariffs at all. But the reciprocal tariffs announced by President Donald Trump raised them to 46 percent (57 percent for standard bikes). The unexpected charges would be due nearly immediately after the product’s clear customs. ‘Our customs broker normally gives us terms (on duties), but that’s for $20,000 or $30,000. Not $1 million,’ said Steve Boyd, Tern's general manager for North America. Even though Tern is taking steps to avoid the charges, their size reveals the scale and potential industry impact of the new tariffs. Tern sells expensive e-cargo bikes but is still a medium-sized brand in this industry. Larger brands that also import from Asia face proportionately larger unplanned-for tariff payments after Wednesday. The company will likely avoid the new fees by expediting a container that is currently in port in California by truck to the brand’s California warehouse. Tern had planned to ship that container by train to another warehouse, but that risks missing the 12:01 a.m. April 9 deadline, when the reciprocal tariffs take effect. The deadline applies to shipments that are ‘loaded onto a vessel at the port of loading and in transit on the final mode of transit or withdrawn from a warehouse for consumption’ after that deadline, according to Trump's executive order. So, shipments that are loaded onto a ship before the deadline will be duty-free, as long as the ship is the ‘final mode of transit.’ ‘With Vietnam being a day ahead of us, I told the factory not to ship us anything after the 8th to be safe,’ Boyd said. If any shipments appear to be in danger of missing the deadline, the company could divert them to Canada or Mexico as a last resort, he said. For Tern, the new tariff is simply a non-starter; Boyd doesn’t see a way forward in this market if it is imposed. ‘I don’t want anything with 46 percent duty,’ he said. ‘I have some inventory here, and I have one container we know is safe, several more (in transit) that might be safe. After that, I don't know, I'm hoping something changes.’ Adjusting wholesale and retail pricing to account for a 46 percent cost increase is impossible, Boyd said. ‘The notion that everyone in the supply chain will sharpen their pencils is not realistic. If we had got just a 10 percent hit, you’d go back and see what we could make work. But 46 percent, I just said, ‘don’t ship us anything else until we figure it out.’ For the long term, Boyd said Tern will look at diversifying its production. But the brand’s e-cargo bikes are specialized machines; setting up factories to produce them is not a quick process. Tern has bikes for the European market assembled in Portugal and might be able to reduce tariffs by having its U.S. bikes made there, he said. In the short term, Tern’s options now include hoping that President Trump negotiates a deal with Vietnam and drops the reciprocal tariff.” HPS ANALYSIS: My compliments to Steve Boyd of Tern for telling it like it is. Steve made it very clear what the new tariffs mean from a financial standpoint to importers like Tern and what the practical alternatives are. From this month forward, every importer of bicycles and e-bikes is going to have to carefully consider the available options, their cost, and the impact on their business and that of their authorized dealers going forward.

04 11 25: “Will tariffs drive more people to shop secondhand? It's a mixed bag, experts say.” National Public Radio npr: “Amid tariffs, trade wars and general economic uncertainty, many Americans are thinking extra carefully about how to spend and save their money. Consumer confidence tumbled in March, with the Conference Board's Expectations Index — based on consumers' short-term outlook on business, income and the labor market — dropping to 65.2 out of 100, the lowest in 12 years. And that was before President Trump announced a new round of sweeping tariffs, prompting retaliatory taxes from multiple countries — including China and the European Union — and fueling concerns about a possible recession. While he announced a 90-day delay this week, a 10 percent baseline tariff remains in effect on goods from all countries … Tariffs are poised to increase the price of all sorts of goods, from groceries to technology to apparel. The U.S. imports nearly all of its clothing and shoes from other countries — including from China, which is not exempt from the tariffs and now faces a rate of 145 percent. ‘The current situation is unprecedented because, simply put, all the major suppliers of apparel to the U.S. market will face a tariff hike,’ explains Sheng Lu, professor of fashion and apparel studies at the University of Delaware. ‘Very likely, these additional sourcing costs will pass on to consumers.’ Price hikes may inspire savvy shoppers to buy more items secondhand, whether in person at thrift or consignment stores or online from retailers like Poshmark, eBay, and ThredUp. Many people — especially members of Gen Z — are already doing so. A 2025 report by Capital One Shopping Research found that approximately one-third of all clothing and apparel purchased in the U.S. over the past year was secondhand. A record 58 percent of shoppers bought secondhand apparel in 2024, according to ThredUp's annual Resale Report, released in March. The report predicts that the market will only continue to grow globally and in the U.S., at least in part due to new government policies around tariffs and trade that are ‘expected to provide a healthy tailwind to secondhand.’ HPS ANALYSIS: This article provides more clarity, with statistics, to emphasize the shift in American consumers, especially younger consumers, to embracing the circular economy and making it acceptable and actually “cool,” a term from my generation, to buy and proudly wear previously owned clothing, which extends to sporting goods, and personal transportation products, like bicycles and e-bikes. While this article doesn’t mention it, our business has already watched as a major brand has embraced previously-owned bicycles in its catalog, merchandising, and marketing as “used” has risen in status to a growth product category, with sales data much sought after and reported side-by-side with sales of new products. The NBDA shows used bicycles and e-bikes as the top gross revenue producing product category, at an average of 50 percent as reported in the latest Cost of Doing Business Report.   

04 04 25: “Bike prices will soar due to new tariffs—our expert shares 5 tips to help you save.” Bicycling Magazine: “The ‘reciprocal’ tariffs will potentially raise bike prices by thousands of dollars, but there are some ways you can get the gear you need without breaking your budget.’ ‘Taiwan, 32 percent; China, 34 percent; Vietnam, 46 percent; Cambodia, 49 percent.’ ‘The new ‘reciprocal’ tariff rates shook me because I know more than most other cycling journalists how it will impact bicycle, e-bike, and other cycling gear prices. The new ‘reciprocal’ tariffs take effect on April 5 with across-the-board 10 percent duties on all imports. Individualized higher rates for specific countries of origin will kick in on April 9. The duty rates jumped off my iPhone screen as I read the first news reports following the April 2 White House press conference announcing the administration’s new round of tariffs. I froze, reread the percentages, and then checked another story to confirm the numbers. I expected higher duties to be enacted in Donald Trump’s second term, but the rates were higher than I or other experts expected.’ ‘How Duties Impact Bike Pricing: Unless you purchase factory-direct and import it yourself, the bicycle’s duty rate is already baked into the price. The duty rate is assessed on the amount the importer paid for the goods, not the final sale price. It is a tax on the product that is almost always passed along to consumers.’ ‘With the new tariff structure (assuming stacked duties) rolling out for April 9, that same bicycle sees a dramatic price increase. Without any changes to anything except for duty, that $4,000 bike will sell for approximately $5,169 at dealers if sourced from Taiwan. If the bike is assembled in Cambodia, you can tack an extra $500 onto that price.’ ‘Ways to Save: This is admittedly a scary time for many Americans—these are uncharted waters for most businesses and consumers. Even with this uncertainty, most of us will not stop riding because bicycles are suddenly more expensive. However, many riders will probably change how, when, and what bikes and gear they buy. These are my five tips to save money on bikes and cycling equipment in the new tariff landscape.

→ Tip 1: Buy A Bike Now

If you want a new bike, don’t hold off until the late spring or summer. Buy that bike now before prices go up. Many bicycle companies and retailers are loaded with excess inventory from a soft bike market in 2023 and 2024. Brands will try to squeeze any extra value from their existing inventory that was purchased at a low price instead of importing the same products at much higher prices.

→ Tip 2: Stock Up On Repair Parts

Farsi also noted that there might be runs on parts. Similar to what riders and bike shops experienced during the height of pandemic sourcing challenges in 2020 and 2021, components and repair parts might also be in short supply after the tariffs kick in. Plan ahead to have those parts and keep your bike running smoothly if shortages hit or prices spike.

→ Tip 3: Buy American

You can also avoid some of the higher prices by buying a U.S.-made bike. While you will probably face higher prices than before the tariffs hit (brands assembling domestically still must pay import duties on frames and parts they source from overseas), you might be able to save some money if you purchase from a company assembling bikes in the States. However, current options for U.S.-assembled bikes start around $2,500.

→ Tip 4: Trade Down

Cyclists often over-buy bikes and equipment; we purchase better stuff than we need for most of the riding we do. Many of us, myself included, are guilty of this. We do this because we love cycling gear, to save weight, or because the premium-level equipment doesn’t cost that much more than the more-than-acceptable mid-tier equivalent. However, when prices suddenly go up, riders often choose to buy one or two levels down. While the U.S. bike market has largely been insulated from this over the last few decades, trading down to acceptable alternatives commonly occurs in other countries when currency rates fall or duties soar.

→ Tip 5: Buy Used

If you can’t buy a bike now and cannot stomach higher pricing or product shortages in a few months, buying used (but not abused) bikes or equipment is a good way to get a better price on gear. There are A LOT of used bikes for sale from private sellers on sites like Facebook Marketplace, Craigslist, and regional bike forums.

HPS ANALYSIS: This recent article from Bicycling Magazine offers excellent advice to American cyclists about the price increases that will roll out shortly from the tariffs on imported bicycles and e-bikes and suggests five tips to help cycling enthusiasts save money. All five are worth bike shops taking a careful look at, and seriously considering for inclusion in short-term merchandising, and in one specific tip, long-term strategy. Tip 1, Buy Now is a call to action for immediate bike shop merchandising to move out inventory at fair and equitable profit margins. Tip 2, Stock Up On Repair Parts is tricky, but here again, bike shops can merchandise repair parts and accessories at fair and equitable profit margins while supplies last. Tip 3, Buy American is also tricky in that the majority of bicycles, parts, and accessories are already higher to high priced, but this is a merchandising opportunity for the dealers that have access to American-made products. Tip 4, Trade down will require working with sales associates to help take shoppers and customers “down-market” while taking maximum advantage of available inventory. Tip 5, Buy used is the “tip” that, in HPS’s opinion, is an opportunity that will help sustain bike shops during the long, cold winter that is ahead. The NBDA is already providing planning tools to bike shops so they can start profitable used bike programs, and more importantly, sustain the 50 percent + gross profit margin opportunity that used bikes represent.  

04-04-25: “Parlee Cycles pauses inventory purchasing in wake of latest tariffs.” Bicycle Retailer and Industry News: “Parlee Cycles CEO John Harrison told BRAIN on Friday the brand has halted inventory purchases, the second bike manufacturer to do so since the Trump administration's reciprocal tariffs were announced Tuesday. ‘I believe that this scale of impact would be mirrored in many industries, and it is that fact that leads me to believe that significant changes to the initial 'Liberation Day' proposals are inevitable,’ Harrison said in an email. 'Right now, we're pausing any imports in the hopes that things settle down over the coming few weeks.’ He said Parlee will continue to import frames from Europe. The brand moved some frame production from China to Portugal about 18 months ago. Imports from Portugal are now hit with a 20 percent reciprocal tariff, like other EU nations, in addition to pre-existing duties (generally 3.9 percent on frames). That's less than the tariff on many other nations that supply bikes, such as China (90 percent total tariff), Cambodia (60 percent), Vietnam (57 percent), and Taiwan (43 percent). Those percentages do not include a potential added tariff on countries that import oil from Venezuela. Parlee assembles the imported small-batch produced frames in the U.S. ‘Given the current tariff proposal, it would take a year or two for us to shift manufacturing and be able to deliver an acceptably priced product for our customers. In the interim, there will need to be significant price increases to the consumer to cover our increased costs. It's almost certain that if that happened, it would result in a huge slowdown in buying. Considering the fragility of the bicycle market, which is still recovering from COVID, I suspect that many businesses just won't have the available resources to survive long enough to see those changes implemented. The result would be a collapse of the bike industry and a massive spike in unemployment in the sector.’ Borealis Fat Bikes said Wednesday that it was temporarily suspending inventory purchases for the 2025-2026 season because of the tariff policies.” HPS ANALYSIS: The Parlee and Borealis Fat Bikes stories are, I am sad to say, just the beginning. Both are small, boutique brands that are doing the only thing they can do under the circumstances, that have been created by larger economic and geopolitical forces, and the collateral damage that is being created as a result. We will hear from the smaller and mid-size players in the first chapters, but it is the stories of the larger multi-national and global players in the later chapters that will complete the first volume. 

04-04-25: “Portuguese factory partners with Cardinal to open US bike assembly plant.” Bicycle Retailer and Industry News: “Since the European Union first imposed anti-dumping tariffs on Chinese e-bike more than a decade ago, Portugal has become the bike-making capital of Europe, producing about 3 million bikes and e-bikes a year. The nation has built a bike industry cluster where suppliers of various components work with assembly factories to efficiently make and assemble bikes, much like Taiwan's famed manufacturing cluster. So it makes sense for American brands, looking to onshore bike production in a time of high tariffs, to look to Portugal for a little inspiration, and some help. Cardinal Cycling Group, the owner of the Time bicycle brand, is partnered with Unibike, a Portugal assembly factory, to open a painting and bike assembly factory in the Spartansburg, South Carolina, area this year. Tony Karklins, the CEO of Cardinal, said the facility will be called Unibike America and is already talking to potential clients to begin painting and assembly. ‘It’s the moment to do this,’ Karklins said, referring to the new tariffs imposed by the Trump administration. ‘Everybody needs this service, and we are going to be the first player here. It will be a facility not controlled by any one bike brand,’ he said, similar to contract assembly factories used by multiple bike brands in Taiwan. Unibike was founded by Sergio Ramos in Soza, Portugal, in the heart of Portugal’s ‘Bicycle Valley’ region. Following a factory fire in 2019, Ramos rebuilt the factory, which was re-opened in 2021. In 2023 NEOVOUV, a French e-bike brand, acquired an 80 percent share in Unibike. Its Portugal factory has powder coating and wet paint facilities and capacity to assemble a quarter million e-bikes per year. Karklins is a leading proponent of U.S. manufacturing and assembly. He was the founder of Allied Cycle Works, the Arkansas-based carbon bike brand that is now owned by a Walton family investment group. Cardinal manufactures Time frames and forks in Europe and will begin production of framesets in South Carolina next month. Separate from Cardinal, Karklins is also a part owner of Munich Composites, which plans to produce carbon rims in South Carolina using assets acquired from a German rim company. Cardinal is also the former owner of Detroit Bikes, which manufactured its own bikes, including welding steel frames, and did assembly for other brands, including Schwinn. Cardinal retains a share in Detroit after selling a majority of the company last year. Karklins said he has been working with Spartansburg development officials to attract Unibike to the area, including traveling to Portugal with regional officials. Spartanburg is a city of about 40,000, 33 miles east of Greenville, South Carolina.” HPS ANALYSIS: This is very interesting and potentially represents a true change agent to the made-in-America scenario. The payoff promised for suffering the pain of changing the math and geo-politics of global trade is bringing manufacturing back to the U.S. Those in our business who have been around as long as I have know the difficulty in making the made-in-America scenario a reality. Bringing a classic original equipment manufacturing (OEM) plant to the U.S. as the core of a “cluster” of domestic component manufacturing plants has been envisioned by Arnold Kamler for decades. No disrespect to Tony Karklins, the CEO of Cardinal, who may be about to make the near-term probability of the made-in-America scenario a reality between now and 2030.

04-04-25: “Uncertainty of U.S. tariffs to unsettle global bicycle trade.” BIKE europe: “New U.S. tariffs were announced on April 3 that will take effect on April 5 and 9. The de minimis ruling on low-cost Chinese imports will close on May 2… Newly announced reciprocal tariffs by the Trump administration in the U.S. has brought a renewed level of uncertainty to the bicycle industry supply chain. The proposed tariffs mean all bicycles entering the country will face some level of tariffs unless the frame itself has been manufactured in the U.S.. The expected result is rising costs for importers on which the market relies, and a stagnating retail market as U.S. consumers face higher prices for a new bike. On April 2, the Trump administration announced new reciprocal tariffs under the International Emergency Economic Powers Act of 1977 (IEEPA). This imposes an additional 10 percent tariff on products from all countries (base duty plus 10 percent) as well as specific, targeted higher base tariff rates on all goods from select countries the administration determined impose high tariffs and related barriers or costs on U.S. goods. The targeted tariff rates for key source countries for the U.S. bicycle industry are: China: 34 percent, Vietnam: 46 percent, Taiwan: 32 percent, Japan: 24 percent, Thailand: 36 percent, EU: 20 percent, Indonesia: 32 percent, Malaysia: 24 percent, Cambodia: 46 percent, India: 26 percent. China dominates U.S. bicycle imports: During a webinar held by the U.S. trade association PeopleForBikes on 3 April, Charles Cooper, managing partner and founder of Brumidi Group, gave an example of how bicycles coming from China will now face tariffs of 79 percent. This is calculated as 34 percent reciprocal tariff plus 25 percent 301 Tariff plus 2o percent IEEPA tariff. According to U.S. customs data, China supplied 86% of bicycle imports into the country in 2024. The additional 10 percent tariffs will go into effect on April 5 for all countries, and the new targeted base tariffs will take effect on April 9. Neither tariff will apply to goods loaded onto a vessel at the port of loading and in transit on the final mode of transit prior to the respective effective date/time. End to De Minimis for Chinese imports: In a second executive order, the administration announced that systems are now in place to collect duty on low-value shipments from China that previously received duty-free de minimis treatment. Accordingly, de minimis treatment for imports from China and Hong Kong valued at or under $800 will end on May 2. There will be two different processes depending on whether goods enter through postal shipment or through other carriers. The former is subject to a duty rate of either 30 percent of their value or $25 per item, and the latter will be subject to all applicable duties, which will be collected under applicable entry and payment procedures. Impact on e-bike adoption: The tariffs are sure to have an impact on the potential success of the e-bike in the U.S. market. Although adoption has been slower than in Europe, it has been seen as a key growth market by some companies. E-bikes accounted for 28 percent of the revenue of the U.S. bicycle market last year, according to a recent survey by PeopleForbikes. How e-bikes will be treated under this new tariff depends on where the electric bike is coming from. So currently there's a 25 percent 301 tariff on electric bicycles from China. Everywhere else, the tariff is still 0 percent. ‘After April 5th, that tariff will be 10 percent no matter where it comes from, because all countries will have that 10 percent minimum,’ explains Matt Moore, policy counsel, PeopleForBikes. ‘After April 9th, it will be whatever the new reciprocal tariff is for that particular country. For example, if the e-bike is coming from Taiwan, the new tariff on April 9th will be 32 percent. The executive order talking about the 10 percent tariff on every country specifically says that that is an additional tariff. My reading of that is, say, if there's a 7 percent tariff on a particular component part from one of those countries, the tariff will now be 17 percent. We have to wait and see how this is actually implemented going into April 9th. It’s a big difference, and this is an issue where there is not yet clarity whether that's an additional tariff or that that is the new base tariff.’ Frame designates country of origin: There is also no option for bike brands doing assembly in the U.S. with parts from Asia to avoid any of the new tariffs. Unlike in the European Union, the tariff will be assessed based on the origin of the frame because customs regard that as the origin of the complete bicycle.” HPS ANALYSIS: Another well researched and provocative article from BIKE europe that does a great job of laying out the facts and data from PeopleforBikes, the American bicycle industry trade association. This article could almost be the introduction to the Cardinal Cycling Group business plan presented in the previous article. There is no question that there are huge unknowns and uncertainties that will emerge as this ongoing and complex story continues to evolve and unfold. HPS is of the opinion that the big takeaway from this article is: “Frame designates country of origin,” because it opines that, unlike the EU, U.S. customs regards the country of origin of the frame to designate the country of origin of the complete bicycle or e-bike.

04-11-25: “U.S. consumer sentiment plunged in April, the fourth consecutive month of declines.” Associated Press AP: “The preliminary reading of the University of Michigan’s closely watched consumer sentiment index, released Friday, fell 11 percent on a monthly basis to 50.8, the lowest since the depths of the COVID-19 pandemic. Over the past year, sentiment has tumbled 34 percent. The decline was ‘pervasive and unanimous across age, income, education, geographic region, and political affiliation,’ said Joanne Hsu, director of the survey. The share of respondents expecting unemployment to rise in the coming months increased for the fifth straight month and is now the highest since 2009 during the Great Recession. While consumer sentiment is not always a reliable indicator of the overall economy, it has at times reflected shifting vibes in how the public feels about presidential leadership. Sentiment among Republicans has dropped 6 percent over the past month as Trump teased, then rolled out a series of aggressive tariffs, only to institute a 90-day pause of some import taxes Wednesday. ‘Interestingly, President Trump appears to be getting much of the blame for much of the deterioration in sentiment, with 67 percent of respondents saying the government is doing a ‘poor job’ on fighting inflation and unemployment,’ said James Knightley, chief international economist at ING. ‘Only 18 percent say it is doing a ‘good job.’ ‘The result of the trade war drama so far is a baseline tariff on most countries of 10 percent, with imports from China getting taxed at a combined 145 percent. Goods from Canada and Mexico face tariffs of up to 25 percent, while imported autos, steel, and aluminum are taxed at that same rate. China retaliated Wednesday with a 125 percent tariff on U.S. goods. The Trump administration has suggested that it cut new trade agreements with more than 75 nations over a span of 90 days.’ ‘Eroding American confidence has also surfaced in the financial markets. Investors are selling off U.S. debt. The interest rate on the 10-year U.S. Treasury note was 4.51 percent in Friday afternoon trading, up from roughly 4 percent at the start of the week. That suggests more economic instability ahead. On Friday, the dollar slumped to a three-year low against the euro. Larry Fink, CEO of the investment firm BlackRock, told CNBC that the U.S. economy is on the cusp of a downturn, if not already there. ‘I think we’re very close, if not in, a recession now,’ Fink said. ‘Americans’ inflation expectations over the next five years are now at the highest since 1991, according to Capital Economics, a forecasting firm. HPS ANALYSIS: There are three things HPS watches carefully: First is GDP: Gross Domestic Product, defined as the value of the final goods and services produced in the United States. The percentage that GDP grew (or shrank) from one period to another is an important way for Americans to gauge how their economy is doing. The United States' GDP is also watched around the world as an economic barometer. The second is jobs, and the monthly numbers of employed and unemployed. Third is consumer sentiment. As we begin the second quarter, the American Bicycle Business is moving into its high season, and an economic downturn could be the collateral damage from the geopolitical chaos that started April 2 when the administration unveiled ‘reciprocal’ tariffs.   

04-12-25: “Trump exempts smartphones and computers from new tariffs.” British Broadcasting Corporation BBC NEWS: “U.S. President Donald Trump's administration has exempted smartphones, computers, and some other electronic devices from reciprocal tariffs, including the 125 percent levies imposed on Chinese imports. U.S. Customs and Border Patrol published a notice late on Friday explaining the goods would be excluded from Trump's 10 percent global tariff on most countries and the much larger Chinese import tax. The move comes after concerns from U.S. tech companies that the price of gadgets could skyrocket, as many of them are made in China. This is the first significant exemption of any kind in Trump's tariffs on China, with one trade analyst describing it as a ‘game changer scenario.’ The exemptions, backdated to 5 April, also include other electronic devices and components, including semiconductors, solar cells, and memory cards.’ ‘Some estimates suggested iPhone prices and other electronic goods in the U.S. would have gone up three times if the costs of the tariffs had been passed on to consumers.’ ‘This is the dream scenario for tech investors,’ Dan Ives, who is the global head of technology research at Wedbush Securities, posted on X. ‘Smartphones, chips being excluded is a game changer scenario when it comes to China tariffs.’ Big tech firms like Apple, Nvidia, Microsoft, and the broader tech industry can breathe a huge sigh of relief this weekend into Monday, he added. The U.S. is a major market for iPhones, while Apple accounted for more than half of its smartphones sales last year, according to Counterpoint Research. It says as much as 80 percent of Apple's iPhones intended for U.S. sale are made in China, with the remaining 20 percent made in India. HPS ANALYSIS: While the president is now saying “…nobody get’s off the hook,” at the end of the day Apple, Nvidia, Microsoft et al do represent the kind of lobbying force that can get things off hooks, or at least get them moved from one so-called bucket to another bucket. Over time there will be exceptions, exemptions, and changes to the baseline and reciprocal tariffs, as the mid-term election looms and the big players discuss trading campaign contributions for favors, including being exempted from all or a portion of the import tariffs. American bike shops have an opportunity, starting with the current Easter recess, when the members of Congress are in their home states and home districts, to reach out with their friends, families, and customers to ask for help. What do they have to contribute? Their vote and the votes they can and will influence if they don’t get relief and go out of business as the result of their member of Congress not doing their job.

04-13-25: “How an Arkansas city became an epicenter of the biking world.” The New York Times: “Buoyed by the interests of the family behind Walmart, Bentonville has become an unexpected hub for cycling. Listen for the click of a bike gear, shifting in tune with its rider. A whoosh of air as tires lift off the ground, then a satisfying thud as the bike returns to earth. The clack of a cyclist’s cleats, fresh off a ride, in the downtown square. This is the soundtrack to Bentonville, a city of about 60,000 near the state’s border with Missouri that has dozens of immaculately kept trails for every level of biker.” “The investment in biking has come largely from the billionaire Walton family and its business, Walmart, which is headquartered in Bentonville. Over more than a decade, Tom and Steuart Walton, grandsons of the Walmart founder, have steered at least $74 million through the family foundation toward the construction of 163 miles of paths and trails for recreation and competition. Those arteries now snake through the city, connecting to hundreds of trails in the surrounding mountains. ‘Cycling is clearly a passion of ours and it’s something that we believe in, and I personally believe that cycling can be a solution for complex problems,’ Tom Walton said in an interview. He added, ‘We never had a huge vision like this. We just never stopped.’ There has always been biking in the foothills of the Ozarks in northwest Arkansas. Some longtime residents recounted learning to bike on unkempt gravel roads and unsanctioned trails. But the new infrastructure is among the cultural amenities that the Walton family has championed, in part to attract corporate employees and tourists to a relatively rural, remote region. The Waltons have also poured money into a major art museum, schools and a new health institute, among other things. ‘Twenty years ago, we were not a leisure destination — we were a business destination,’ said Kalene Griffith, the chief executive of Visit Bentonville and who now owns a mountain bike, a gravel bike, and an electric bike. ‘Cycling and sports is what changed our weekends for us.’ The web of connected trails, the construction of which began in earnest around 2012, means smooth rides close enough to downtown that cyclists seeking a longer journey do not need to drive out to a starting point. A regional greenway connects Bentonville to other towns in the region. ‘I’m fine that we don’t have large mountains, or a super long history of being an outdoor mountain bike town,’ Tom Walton said. ‘We have a model that is replicable for lots and lots of other towns that look and feel like Bentonville, that are across the middle of our country.’ HPS ANALYSIS: The NBDA has been building the Retailer Summit held in Bentonville into a national event. The third NBDA Retailer Summit is being held May 20 – 22. Some NBDA Members will be visiting for the third time, and others for the first time. What the article does not say is that PeopleforBikes has established a permanent office in the Ledger office building with four to six full-time staff members, and Specialized has a retail “experience center” also located on the ground floor of the Ledger. Other bicycle-related brands and companies are also located in Bentonville and offer tours after the Retailer Summit business sessions. For more information about the 2025 NBDA Retail Summit, visit www.nbda.com 

04-14-25: “Terry Precision Cycling among 5 business suing Trump administration over increased tariffs.” Bicycle Retailer and Industry News: “Terry Precision Cycling is one of five owner-operated businesses suing the Trump administration, saying it lacks authority to issue increased tariffs. Filed in the U.S. Court of International Trade, the lawsuit filed by the Liberty Justice Center on behalf of Terry and the others on Monday, argues that ‘the President of the United States claims the authority to unilaterally levy tariffs on goods imported from any and every country in the world, at any rate, calculated via any methodology — or mere caprice — immediately, with no notice, or public comment, or phase-in, or delay in implementation, despite massive economic impacts that are likely to do severe damage to the global economy.’ Among other requests for relief, the suit asks for damages in the amount of any tariffs collected by the administration; payment of plaintiff's attorneys' fees; and any other damages and relief the court deems appropriate. Terry Precision Cycling is based in Vermont and specializes in women's cycling apparel. It was affected by the 2019 tariffs. The increased tariffs announced April 2, but paused for 90 days a week later, threaten the company's survival, according to Nik Holm, Terry president. ‘Even before this year's increases, we were already paying tariffs of up to 39.5 percent,’ Holm said in a Liberty Justice Center news release announcing the lawsuit. ‘With the additional 145 percent now imposed, we can't survive long enough to shift course. Twenty years ago, we made all our apparel in the U.S., but gradually moved production overseas to sustain our business. Bringing manufacturing back would require a long-term strategy supported by consistent government policies, investment in factories with skilled sewers, and access to raw materials that are not subject to high tariffs. Many of our products rely on raw materials that are simply not produced in the U.S.’ The lawsuit argues that while Trump invoked the International Emergency Economic Powers Act to justify the additional tariffs, under law he can only do so after declaring a national emergency in response to national security, foreign policy, or the U.S. economy originating outside the U.S. Furthermore, according to the suit, the justification of a trade deficit in goods is neither an emergency nor an unusual or extraordinary threat. Trade deficits have existed for decades, and do not constitute a national emergency or threat to security, according to the lawsuit, and the administration also imposed tariffs even on countries that the U.S. does not have a trade deficit, further undermining the administration's justification. While he paused the added tariffs, Trump increased those on China to 125 percent and kept a new 10 percent tariff in place on the rest of the world. The other plaintiffs are: VOS Selections, a 39-year-old New York-based business specializing in the importation and distribution of small-production wines, spirits, and sakes, FishUSA, Inc., a 25-year-old retail and wholesale e-commerce business specializing in the production and sale of sportfishing tackle and related gear. Like much of the tackle industry, it sources many of its products from abroad, including Canada, China, South Korea, and Kenya. Genova Pipe, a privately held company in Salt Lake City, manufactures ABS pipe in the U.S. using imported ABS resin from South Korea and Taiwan. The tariffs have increased raw material costs, impacting their Washington state factory, which primarily exports to Canada. MicroKits LLC, a small business based in Charlottesville, Virginia, that makes educational electronic kits and musical instruments. The company imports electronic components from China, Mexico, Taiwan, and Thailand, then assembles and finishes the products in its local workshop. In addition to Trump, others named in the suit are Pete R. Flores, the U.S. Customs and Border Protection acting commissioner; Jamieson Greer, the U.S. Trade Representative ambassador; and Howard Lutnick, the Secretary of Commerce. In 2021, the Flagg Bicycle Group acquired Terry Bicycles and renamed it Terry Precision Cycling. HPS ANALYSIS: HPS is hearing more chatter asking: “Is that legal?” relative to the executive orders and related actions being taken by the administration. Terry Precision Cycling and its parent company, Flagg Bicycle Group, that also owns QBP and Workstand, has decided to replace words with action – legal action! It will be interesting to see how far this litigation progresses, and who else joins Terry Precision Cycling and the other plaintiffs. HPS will be watching this case, as we are sure BRAIN will.

Contact Jay Townley: jay@humanpoweredsolutions.com