TARIFFS, TINY CARS, E-BIKE LAWS AND MORE

By Jay Townley

01 17 26: “Trump announces tariffs on European countries opposing Greenland takeover.” The Washington Post: “The United States will impose tariffs on countries that have sent troops to Greenland in recent days, President Donald Trump said Saturday, dramatically escalating his effort to acquire the Danish territory despite assertions from Greenland and Denmark that the Arctic island is not for sale. ‘After Centuries, it is time for Denmark to give back — World Peace is at stake!’ Trump wrote on Truth Social. Trump said that ‘Denmark, Norway, Sweden, France, Germany, The United Kingdom, The Netherlands, and Finland have journeyed to Greenland, for purposes unknown,’ a reference to the European countries who have said in recent days that they will send troops to Greenland as a show of solidarity with Denmark, after weeks in which Trump and top allies have renewed demands to take the territory. Most European countries have been vocal in their opposition to Trump’s efforts to take over Greenland. Calling it a ‘potentially perilous situation,’ Trump said he would impose 10 percent tariffs on imports of all goods starting Feb. 1 from those countries to the U.S., increasing to 25 percent on June 1. He said it would only be removed after a deal is reached for ‘the Complete and Total purchase of Greenland.’ ‘This is a very dangerous situation for the Safety, Security, and Survival of our Planet. These Countries, who are playing this very dangerous game, have put a level of risk in play that is not tenable or sustainable,’ Trump said, embracing what amounted to a military threat against some of Washington’s closest and oldest allies.” HPS ANALYSIS: In mid- January, the administration was threatening Denmark, Norway, Sweden, France, Germany, and the U.K. with 10 percent tariffs beginning February 1st, increasing to 25 percent on June 1st, for opposing the U.S. taking over Greenland. France, Germany and the UK are important to the U.S. bicycle business. While recent events may have made this threat mute, it is illustrative of the chaos and confusion the administration has, and will continue to introduce, into the business of importing products into the U.S. This month’s newsletter edition focuses on radical uncertainty and tariffs moving from financial department spreadsheet scenarios to operational reality and supply chain resilience and liquidity, creating hybrid business models.

01 20 25: “Trump greenlit tiny Kei cars, but will Americans actually buy them?” British Broadcasting Corporation bbc: “America is known as the land of big cars and even bigger SUVs, but Donald Trump has an idea that could change that. The president wants to bring to the U.S. tiny vehicles, like those commonly seen on the streets of Japan, in the form of mini hatchbacks and vans half the size of a Ford F-150 pickup truck. So-called Kei cars - short for kei-jidōsha, literally ‘light vehicle,’ became popular in Japan after World War Two as an economical means of transport in its crowded cities. They have also become popular across Asia. Despite Trump's enthusiasm for micro-cars, importers and drivers in the U.S. aren't so sure they are a viable option in the vast country. Among the obstacles are whether manufacturers can keep prices low, make the vehicles safe enough, and whether big-car-loving Americans can be convinced to downsize. After a visit to Japan, Trump said in an online post in December: ‘I have just approved TINY CARS to be built in America.’ ‘These cars of the very near future are inexpensive, safe, fuel efficient, and, quite simply, AMAZING!!! START BUILDING THEM NOW!’ His suggestion marks a shift that would undo a long-running rule barring small American-made vehicles. While there are already some Kei cars in the U.S., they are a rare sight and have to be at least 25 years old to run legally on American roads. “U.S. transport secretary Sean Duffy said as much, acknowledging that small cars would ‘probably not’ be well-suited to American freeways. But these cars could be a ‘great solution’ for people who drive in cities, Duffy said on business news channel CNBC. Smaller cars, smaller prices? Key to Trump's enthusiasm for small cars is the promise of lower prices. A spokesperson for the U.S. transport department told the BBC that the move will help Americans afford vehicles that meet their needs, whether electric, petrol-powered, or in the form of a ‘mini-van or micro.’ But it is yet to be seen if American manufacturers can build small cars at prices lower than existing sedans. Car prices in the U.S. have yet to return to pre-pandemic levels after a global shortage of computer chips was one of the factors that drove up prices. At the same time, American households have faced a rising cost of living.” HPS ANALYSIS: I had to read this twice and still didn’t believe it until I realized the U.S. Secretary of Transportation, Sean Duffy is backing the administration’s initiative to bring tiny Kei cars to the American automobile market. Many Americans have traveled to Japan and elsewhere in Asia and have seen up front and personal these little internal combustion cars and trucks, but importing them to introduce a lower cost form of individual transportation, when Americans already have bicycles and e-bikes designed for all the possible uses and needs for light mobility, seems just nuts. This is another reason for the American bicycle business to rally around the League of American Bicyclists and work toward alignment and common purpose. 

01 20 26: “Canyon to reduce workforce by up to 320.” Bicycle Retailer and Industry News: “Canyon says it is aiming to ‘reduce complexity and simplify processes,’ a procedure that includes reducing its workforce by up to 320 workers. The company said the workforce reductions will be at its ‘core locations.’ The company now has about 1,600 employees. Canyon has informed its works council, which is a kind of employee representation group in Germany and the Netherlands. ‘The company said it still plans to open an e-bike center at its headquarters this year.  Canyon announced in April that it was reducing its workforce in the U.S. The most recent financial statement from Canyon's ownership group, GBL, said sales were down 7 percent over the first nine months of the year because of industry oversupply and discounting.” HPS ANALYSIS: Canyon is an example of how the current market dynamics are impacting the direct-to-consumer (DTC) brands globally. Pre-COVID, the entry of the Canyon brand was widely anticipated in North America, but the reality was kind of ordinary and certainly not the big bang this high-profile DTC European brand was anticipated to make, at least by me. After settling into its niche, Canyon became a leader in the growing DTC market segment that flourished during the pandemic, but also had to adjust to the entry of the traditional, mainstream dealer brands to the DTC segment of the market as the pandemic receded and consumers changed and shifted their buying habits.   

01 20 26: “New Jersey passes law requiring license, registration, insurance for e-bike riders.” Bicycle Retailer and Industry News: “New Jersey's governor signed a bill into law on Monday that will require a license, registration, and insurance for all e-bike riders. State lawmakers say it addresses a rising number of crashes, including two killed in separate incidents. The legislation extends the classification of motorized bicycles to include pedal bicycles with fully operable pedals and an electric motor that can provide assistance when pedaling or exclusively propelling the bike. Riders in the state will need to meet those requirements within the next six months to legally ride their bikes. They also will need to be at least 17 with a valid drivers license or at least 15 with a motorized bike license. New Jersey now has its own three-class e-bike definitions: ‘low-speed electric bike,’ with pedal assist up to 20 m.p.h.; ‘motorized bike,’ with throttle assist up to 28 m.p.h.; and ‘electric motorized bicycle,’ with pedals that can go over 28 m.p.h.. The law also prohibits the online sale of any electric motorized bicycle for one year. In a statement to BRAIN, PeopleForBikes, while overall disappointed in the law, said one of the best aspects is that New Jersey authorities will enforce provisions that ban online advertising or sale of e-motos meeting its definition of an ‘electric motorized bicycle.’ 'For the information of companies and individuals responsible for making and selling these motor vehicle products, the ban takes effect immediately and includes 'any two-wheeled vehicle with fully operable pedals and an electric motor capable of greater than 750 watts that is capable of reaching a speed greater than 28 miles per hour.' It's fairly straightforward to identify these products from their own websites and social media advertising, especially e-motos that have excessive motor power and built-in 'fast' modes, are deceptively sold as a Class 2 e-bikes but are designed to be easily unlocked by following manufacturer instructions, and so-called 'electric dirt bikes' that are inappropriately equipped with pedals. We look forward to hearing from state authorities on their progress on stopping the sale of these e-motos.’" HPS ANALYSIS: This New Jersey law is a sad example of what is occurring because of a total lack of alignment and focus on consumer safety by the American bicycle industry. What is described above simply should have never been allowed to happen by the primary lobbying entity representing the interests of the domestic bicycle business. HPS has advocated for and helped the NBDA craft policy and procedure statements for bike shops that focus on both bike shop and consumer safety that embrace bicycles, inclusive of e-bikes and lithium-ion batteries. However, neither NBDA nor HPS have the financial wherewithal to support active lobbying at the level needed to positively influence state legislatures, like New Jersey, or the federal government. That is why alignment between all of the entities that currently represent all of the interests of the American bicycle business is required to be successful going forward. 

01 20 26: “Supreme Court doesn't rule on tariffs, with next potential decision in February.” Bloomberg: “The U.S. Supreme Court is dashing any hopes of a quick rollback of President Donald Trump’s tariffs. The justices are set to start a four-week recess next week without having ruled on pending challenges to most of the duties Trump has imposed over the last year. After Wednesday’s hearing on Trump’s effort to fire Federal Reserve Governor Lisa Cook, the justices don’t have another scheduled courtroom session until Feb. 20. The wait means the disputed tariffs remain in place for now, costing importers more than $16 billion every month, according to federal government data. At that collection rate, the total collected under the law at the center of the case, the 1977 International Emergency Economic Powers Act, will surpass $170 billion by Feb. 20, according to Bloomberg Economics analyst Chris Kennedy. The court heard arguments on Nov. 5 on an expedited basis, setting a schedule that suggested an ultra-fast ruling might be in the offing. Some close watchers of the court predicted a decision could come in a matter of weeks, rather than the usual months. But by not ruling on Tuesday — when the justices resolved three lower-profile cases — the court suggested a decision isn’t likely for at least another month, given its normal practice of announcing all decisions in argued cases from the bench. A ruling against Trump would deliver his biggest legal defeat since returning to the White House. The court is considering Trump’s April 2 ‘Liberation Day’ tariffs, which placed levies of 10-50 percent on most imports, along with duties imposed on Canada, Mexico, and China in the name of addressing fentanyl trafficking. A Trump loss could also undercut his threat to impose more tariffs on European countries that are resisting his attempt to take over Greenland. Trump hasn’t said what legal authority he would try to use to impose those duties. If the tariffs are struck down, the White House has said it will quickly replace them using other legal tools, though Trump said Tuesday the alternatives would be a poor substitute. ‘I don’t want to scare you, but it’s much more cumbersome — not as good, not as good for national security as this,’ he told reporters. ‘We have a perfect system right now.’ Refund Complications: The longer the court deliberates over the case, the trickier refunds could become.” HPS ANALYSIS: So, back on January 20, a month before the Supreme Court actually handed down its decision, we wanted to give our readers the timber and tone of the American business community as the court stepped down for a four-week recess. Approximately $16 billion in additional tariffs were collected, and the anticipated ruling against half of the tariffs in force and effect – specifically those under the IEEPA – which was anticipated based on the justices’ questions and comments during oral arguments, actually occurred a month hence. In other words, there were no real surprises, and the question of refunds hangs like a dark cloud over the country and all of the importers of record. 

01 20 26: “Regardless of whether Vingegaard succeeds at the Giro and becomes just the eighth rider of all time to win all three grand tours, there is a question as to whether U.S.-based fans will even be able to watch that history being made.” AIRmail WEEKLY NEWSLETTER: “No U.S. streaming service currently has any RCS-organized races, including the Giro d’Italia, listed on its 2026 schedule. In fact, HBO Max, the platform RCS has partnered with in the past, does not list any road or mountain bike events on its 2026 cycling calendar. According to reporting from Escape Collective, RCS has still not secured a buyer for its international television rights, despite the 2026 World Tour season already getting underway. In an era when most major sports leagues are receiving once-unfathomable sums for their broadcast rights, cycling’s ongoing inability to effectively monetize its biggest events at all (outside of hosting fees) stands in stark contrast to the historic level of talent currently on display in the peloton – more on that below.” HPS ANALYSIS: This may be an indicator of both the shift in consumer interest and the overall financial condition of the active sport segment of the global bicycle business. Evidently, the cable and streaming broadcasters do not perceive a big enough paying audience, or there actually isn’t a big enough paying audience, to make a commitment to broadcast the upcoming Giro to American audiences. This isn’t discussed in the North American trade press, although HPS thinks it should be.

01 21 26: “Fire breaks out at RadRetail location in California.” Bicycle Retailer and Industry News: “A fire that started at the Rad Power Bikes retail store here on Sunday night is under investigation by the Huntington Beach Fire Department. ‘We’re working with local authorities to review a thermal incident that occurred at our Huntington Beach store Sunday evening,’ a Rad Power Bikes spokesperson told BRAIN. ‘The incident was contained and happened while the store was closed. The cause of the fire has not been confirmed.’ Huntington Beach Fire Department responded to the blaze at about 7:07 p.m. at Pacific City Mall, home to several other merchants and restaurants. ‘While we can confirm there was a response to this location for a reported structure fire, the incident is currently under investigation by Huntington Beach Fire Department Fire Investigators, so we are unable to release any further details regarding the nature of this incident,’ a Huntington Beach Fire Department spokesperson told BRAIN. In November, the Consumer Product Safety Commission issued a warning about some Rad Power Bikes models because the lithium-ion battery can unexpectedly ignite and explode. Rad Power Bikes did not agree to a recall, according to the CPSC, and the brand told the agency that, given its financial situation, it can't offer replacement batteries or refunds to consumers. In December, Rad Power Bikes filed for Chapter 11 bankruptcy protection in advance of completing a sale of the company. The Rad spokesperson said Wednesday the company continues the bankruptcy process as it searches for a buyer.” HPS ANALYSIS: Lithium-Ion battery fires are now well enough understood that an incident that occurred while “…the store was closed” can be fairly accurately reconstructed on paper, with the conclusion or conclusions being fairly close to reality. While HPS is not aware of any additional details being released, the proximity to a recall investigation also creates some serious questions that should, but probably will not be answered. 

01 22 26: “Spending is hot. Saving is not. Something has to give.” Bloomberg: “The U.S. government released some long-delayed data Thursday that seemed to prove true the cliché about never betting against American consumers. According to the Bureau of Economic Analysis, spending increased 0.3 percent in both October and November when adjusted for inflation. The results were in line with the average monthly gain over the past three years, which may lead some to falsely conclude that perhaps Americans aren’t as angry and upset with the high cost of living as the surveys and polls suggest. A close look at the data shows that households are using a greater portion of their incomes to finance consumption. That can be seen in the declining saving rate, which tumbled from 5.5 percent in April to 3.5 percent in November. Not including the wild gyrations during the COVID years, you have to go way back to 2008 to find the last time the saving rate was so low. The saving rate was near 7 percent just before COVID hit. Looked at another way, personal savings have dropped by a whopping $469.2 billion since April, or 37 percent, to $799.7 billion, BEA data show. The ‘impressive strength’ in spending ‘masks a more troubling reality,’ EY-Parthenon Senior Economist Lydia Boussour wrote in a research note. ‘Beneath the surface, many families are grappling with depleted savings and the challenges of fewer job opportunities and slower income growth, which is eroding their purchasing power.’ This can’t go on much longer; consumers will eventually pull back on their spending, probably sooner rather than later. This is no small matter for the economy, given that consumption accounts for two-thirds of gross domestic product. The Conference Board reported in late December that its gauge of consumer confidence fell for a fifth straight month.” HPS ANALYSIS: This article is in line with all of the economic articles covered in this month’s edition. American consumers are still spending, but they are not saving, and least as not much as they have previously. HPS is following the assumption by some, if not most economists, that this cannot go on much longer, and that consumers will eventually pull back from spending as much, or altogether. The bicycle business has been and is suffering from a reduction in consumer spending in related channels of trade, including the specialty bicycle retail, or bike shop channel. Reading on, we will see that Bloomberg has declared a “soft landing” — acceptable rates of inflation and employment/unemployment to hold off a recession. Keeping in mind that the economic data available mid-January was mostly 2025 year-end, we will have to monitor this closely to see if something does give. 

01 22 26: “Why New Jersey’s radical new e-bike law is the harshest one yet.” electrek: “New Jersey has just rewritten the rules on electric bikes – and not in a way most of the e-bike world was expecting. This week, Gov. Phil Murphy signed a sweeping new law that effectively scraps the familiar three-class e-bike system and replaces it with something far closer to car and motorcycle-style regulation. In doing so, the Garden State may have gone further than any other U.S. state in cracking down on all forms of electric two-wheelers – including the low-speed, pedal-assist e-bike models that make up a large segment of e-bike use nationwide. Under the new law, New Jersey no longer distinguishes between Class 1, Class 2, and Class 3 e-bikes, which has become the standard used by the majority of states in the U.S. to classify street-legal e-bikes. Instead, virtually all electric two-wheelers are grouped into a single category. Starting one year after the law takes effect, owners will be required to register their e-bikes, carry insurance, and hold a driver’s license. Riders 14 and under are banned entirely, while adults with a standard driver’s license won’t need an additional endorsement. The law was introduced following several high-profile and fatal crashes involving electric two-wheelers, many of which involved high-speed, motorcycle-like e-motos. State leaders argued that existing regulations hadn’t kept pace with the rapid growth and changing nature of electric bikes on New Jersey roads. But critics say the law doesn’t target the problem – it bulldozes right past it.” HPS ANALYSIS: electrek takes a good, hard look at the New Jersey e-bike legislation covered earlier, and doesn’t like what it sees. And no wonder. Having to unnecessarily register, license, and carry insurance for low-speed electric bicycles, when e-motos are clearly the source of the problems that have surfaced, is totally unnecessary overkill. However, the American bicycle business is now on its back foot and being pushed into a corner because it could not muster and mount a logical, defensible position. We are told the bicycle industry became aware of this situation in the New Jersey legislature in early December 2025, and hired a local lobbying firm and deployed both funds and knowledgeable staff. Why then did this legislation make it through both chambers and get signed into law?

01 23 26: “CEOs flag jittery U.S. consumers as global tensions intensify.” Bloomberg: “Corporate executives are warning that jittery U.S. consumers and mounting geopolitical tensions are starting to weigh on demand as the earnings season unfolds, even as headline economic data remains resilient. Airlines were among the first to flag the risks. Delta Air Lines Inc. said geopolitical uncertainty is clouding its profit outlook, while United Airlines Holdings Inc. warned that global tensions are beginning to hit some travel demand. Executives at consumer staples companies Procter & Gamble Co. and McCormick & Co. said shoppers remain cautious. Signs of strain are lingering across industrial sectors. 3M Co. slid the most since April after its outlook missed estimates, with the maker of Post-it notes citing uncertainty across its consumer and auto businesses. Fastenal Co. and JB Hunt Transport Services Inc. likewise disappointed investors, pointing to uneven demand and a fragile freight market. The increasingly downbeat commentary contrasts with many headline indicators. Data from last year showed solid growth and resilient consumer spending, and about 80 percent of S&P 500 Index members reporting so far have topped analysts’ expectations, according to Bloomberg Intelligence. Still, executives say policy uncertainty and geopolitical risks are overshadowing otherwise constructive fundamentals. ‘It does make it much harder for management to plan,’ said Steve Sosnick, chief strategist at Interactive Brokers, referring to shifting trade, fiscal, and foreign policy signals. ‘But what CEO is going to say, the policy instability coming out of the White House is making it very difficult for me to manage my business?” HPS ANALYSIS: In our seminars at the CABDA Expo this season, HPS points out that everything we do in the bicycle business starts, is all about, and ends with the consumer!. So, it is natural for consumers who purchase and use bicycles, including e-bikes, to be affected by geopolitical events, U.S. import tariffs, and economic events. CEOs of corporations that are involved with consumers in whole or part are going to have to make consumer habits, attitudes, and changing demographics a part of their strategic and business planning. This includes specialty bicycle retailers. The difference is size. The CEO of a Fortune 500 may think they have to be very careful not to get the attention of the administration or the president, but the owner of a bike shop has to be all about their customers, and what they want, need, and are feeling about everything that affects them.

01 23 26: “Vietnam leader To Lam consolidates power as country targets 10 percent growth.” National Public Radio npr: “To Lam was reelected Friday as general secretary of Vietnam's ruling Communist Party and appears poised to become the country's most powerful figure in decades, with analysts expecting him to assume the presidency in a break from Vietnam's tradition of collective leadership. Lam, 68, pledged to accelerate economic growth and was reappointed unanimously by the 180-member Central Committee at the conclusion of the National Party Congress that ran from Monday through Friday. No formal announcement was made about the presidency. But the composition of the newly elected 19-member Politburo, the party's top decision-making body, ‘strongly suggests’ Lam will further concentrate his power with the presidency, said Le Hong Hiep, a fellow at Singapore's ISEAS–Yusof Ishak Institute. Such consolidation could speed decisions and push through reforms, he said, but risks weakening intra-party checks and complicating succession. The model mirrors power structures in China under Xi Jinping and neighboring Laos. The Congress was shaped by the central question of whether Vietnam can transform itself into a high-income economy by 2045, setting a target of 10 percent or higher annual growth from 2026 to 2030. Party leaders say this will require moving beyond cheap labor and export-led growth toward productivity, technology, and a stronger private sector. ‘We must achieve double-digit growth to reach the set goals,’ Lam said.” Vietnam makes high-stakes push for growth: Vietnam has set an ambitious target of 10 percent or higher annual economic growth over the next five years, placing the private sector at the center of its development strategy in a notable shift for the communist state. The country fell short of its earlier aim of 6.5 percent to 7 percent growth in the first half of the decade, despite posting a robust 8 percent expansion in 2025. Policymakers are recalibrating the growth model to give a leading role to private enterprise and emphasize higher-value industries, modernized production, and greater use of science, technology, and digital tools. ‘What stands out this cycle is not just the direction, which is broadly consistent, but the sense of urgency,’ said Richard McClellan, founder of consultancy RMAC Advisory. ‘Vietnam's window of strategic opportunity won't stay open forever.’" HPS ANALYSIS: Vietnam has become one of the top four source countries for bicycles and e-bikes imported into the U.S. Accordingly, the trade deal negotiated between Vietnam and the U.S. and the resulting import tariffs are important to the health of specialty bicycle retailers. So too is Vietnam’s economic condition and internal economic planning. To Lim, general secretary of Vietnam's ruling Communist Party, is, according to this article, about to consolidate his power by also becoming president. At the same time, he has set the political stage for Vietnam to transform itself into a high-income economy by 2045, setting a target of 10 percent or higher annual growth from 2026 to 2030. While this is good news for the bicycle and e-bike entities established in Vietnam, it also means keeping up with investment and orders for merchandise. 

01 26 26: “Rad Power Bikes reaches deal to sell itself for $13.2M” TC TechCrunch: “Electric bike company Rad Power Bikes has reached a deal to sell itself to a company called Life Electric Vehicles Holdings (or Life EV) for around $13.2 million, a little more than a month after entering the bankruptcy process. Florida-based Life EV bills itself as a ‘developer, manufacturer, and distributor in the light electric vehicle industry.’ It offers a number of electric bikes for sale on its website, although most of them were labeled as ‘sold out’ at the time this article was published. A filing to the bankruptcy docket over the weekend shows that five entities participated in an auction on the Rad Power assets on January 22. The first bid came in at $8 million, and parties traded bids until Life Electric Vehicles came away as the winner. When accounting for Rad Power’s liabilities, the total value of the bid is $14.9 million. Another e-bike company called Retrospec had the second-highest bid of $13 million and is being labeled as the ‘backup bidder’ in case the deal with Life EV falls through. The bids were a steep discount to Rad Power’s peak $1.65 billion valuation, which was reached in October 2021, per PitchBook. The company has raised a total of $329.2 million, according to PitchBook data. The acquisition still needs to be approved by the bankruptcy judge. Rad Power is not the only company in the micromobility world to seek bankruptcy protection in recent years. Peers like VanMoof and Cake went through restructurings and found new owners. Scooter company Bird also went through the bankruptcy process. It’s not clear what Life EV plans to do with Rad Power. Life EV CEO Robert Provost directed questions to Rad Power. ‘There is still a process underway, and there is an exciting future being planned for Rad Power,’ he wrote in a message. TechCrunch was unable to reach Rad Power for comment; this article will be updated if the company responds.” HPS ANALYSIS: There has not been a lot of detail since this deal was announced, and HPS will reach out to the Rad Power representatives attending the CABDA Expo West in Las Vegas, March 18-19, to see if more information is available, including approval by the bankruptcy judge. More information from the purchaser, Life Electric Vehicles Holdings (or Life EV) would also be helpful in determining the business model and strategy it is planning for the future of Rad Power Bikes.

01 27 26: “U.S. Consumer confidence plummets to lowest level since 2014.” Bloomberg: “U.S. consumer confidence declined in January to the lowest level in more than a decade, on more pessimistic views of the economy and labor market. The Conference Board’s gauge decreased to 84.5, from an upwardly revised 94.2 last month, data out Tuesday showed. The figure was the lowest since May 2014 and fell short of all estimates in a Bloomberg survey of economists. U.S. Consumer Confidence Plunges to Lowest Since 2014: A measure of expectations for the next six months fell in January to the lowest since April, while a gauge of present conditions dropped to the lowest in nearly five years. ‘The expectations index has greatly overstated the weakness in spending in recent quarters,’ Oliver Allen, senior U.S. economist at Pantheon Macroeconomics, said in a note. ‘But we’d be surprised if its recent deterioration proves to be an entirely false signal, particularly given the recent stagnation in real incomes and the already rock-bottom personal saving rate.’ After a slight improvement in December, confidence resumed its downward slide amid concerns about high prices and sluggish job growth. Economists project the labor market will largely remain stagnant this year with limited job opportunities, though they don’t anticipate widespread layoffs. What Bloomberg Economics Says: ‘Spending has remained resilient, and upcoming tax refunds should further support household purchasing power. That makes us think the decline in confidence is overdone, and will rebound soon.’” HPS ANALYSIS: Consumer Confidence has fluctuated and is due to rebound if economic conditions improve. HPS currently is of the opinion that the Bloomberg economists are a bit too optimistic. While the cost increases attributable to tariffs will, for the most part, seep through pricing this quarter, employment may falter as pressure from immigration enforcement increases the shortage of workers in agriculture and construction through Q1 into Q2. Consumer Confidence will teeter for a month or two until inflation and employment numbers settle in over the next several months.

01 28 26: “Amazon and UL sue Chinese e-bike makers over false UL certification.” Bicycle Retailer and Industry News: “Amazon and UL are suing five e-bike and e-scooter companies, alleging they improperly labeled products with UL trademarks. The retailer and the testing company filed suit Jan. 23 against three Chinese companies, one Hong Kong-based company, and one individual in the counterfeit case. The suit also lists between one and 10 unnamed defendants. Amazon and UL, in the case filed in the U.S. District Court for Western Washington in Seattle, say the defendants advertised and sold products bearing one of four registered UL trademarks in 2024 and 2025. ‘As a result of their illegal actions, defendants have infringed and misused UL’s IP; breached their contracts with Amazon; willfully deceived and harmed Amazon, UL, and their customers; compromised the integrity of the Amazon Store; and undermined the trust that customers place in Amazon and UL,’ according to the complaint. The complaint claims the various defendants conspired in the alleged counterfeiting scheme, which included registering as third-party sellers with Amazon. In registering as sellers, the defendants signed Amazon Services’ Business Solutions Agreement, which designates Washington state or federal courts as the appropriate venue for claims related to the sale of counterfeit products in the Amazon Store. The complaint asks for actual damages and the impoundment and destruction of any products inappropriately bearing the UL trademarks, among other relief.” HPS ANALYSIS: Good! It is about time that Amazon got involved in doing the right thing, and joining with UL in suing Chinese e-bike makers over false UL certification is definitely the right thing. The question now is, how committed is Amazon to staying with UL in prosecuting the Chinese companies involved. Time will tell, but HPS hopes that this is the beginning of an ongoing collaboration to maintain the integrity and reputation of testing certification to UL Standards.  

01 30 26: “Trump thinks a weaker dollar is great for America. Is he right?” National Public Radio npr: “The dollar continues to sink — but is that a good thing for the U.S. economy? President Trump seems to think so. On Tuesday, he said he welcomed the decline. Compared against a basket of major foreign currencies, the dollar is now the weakest it has been in four years. ‘I think it's great,’ Trump said on Tuesday when addressing reporters. ‘Look at the business we're doing. The dollar's doing great.’ There are several reasons the dollar is down so sharply, including investors' fears about the United States' economic policies under Trump. And there are certainly benefits to a weaker dollar — including to domestic manufacturers. When the value of the dollar drops, American exports can become a little less expensive for buyers in other countries, hence making them more attractive. But there's a flip side: A weaker dollar means that goods imported into the U.S. from abroad can become more expensive.” HPS ANALYSIS: HPS has jumped on this topic in previous editions of this newsletter. The American bicycle industry and business is import-dependent and will remain so into the foreseeable future. As such, a weaker dollar means that bicycles, e-bikes, and bicycle parts and accessories imported into the U.S. can and will be more expensive. This contributes to higher prices and inflation. 

02 06 26: “Scientific study shows e-bikes benefit a surprising part of the body.” electrek: “From a fitness perspective, electric bikes are often framed as a way to make cycling easier on the legs or more accessible for people who might otherwise avoid riding. But new research suggests the biggest benefits of e-bikes for older riders may be happening somewhere else entirely: the brain. A study performed by researchers from the University of Reading and Oxford Brookes University found that cyclists aged 50 to 83 experienced measurable cognitive and mental health benefits from regular cycling, whether they were riding traditional pedal bikes or electric-assist models. In other words, e-bikes didn’t dilute the benefits of cycling. In some cases, they may have enhanced them. The researchers tracked older adults who rode for around 90 minutes per week over an eight-week period, splitting participants between standard bicycles and e-bikes. The result was improved executive function and processing speed in both groups, along with noticeable boosts in mental health and well-being. Lead researcher Dr. Louise-Ann Leyland said the findings were especially encouraging because they occurred outside a controlled lab setting, in real-world urban and natural environments. That can make a big difference since riding outdoors adds layers of sensory input, navigation, and social interaction that stationary exercise simply can’t replicate. What surprised the research team most, however, was that the e-bike group often showed greater improvements in certain cognitive and well-being measures than the pedal-only cyclists. Conventional thinking assumed that higher cardiovascular exertion would translate to stronger brain benefits. Instead, confidence and consistency turned out to be key factors.” HPS ANALYSIS: This article and this research need to be spread throughout the bicycle business and the bicycling community made part of a national, unified educational program. New research suggests the biggest benefits of e-bikes for older riders may be to the brain. “A study performed by researchers from the University of Reading and Oxford Brookes University found that cyclists aged 50 to 83 experienced measurable cognitive and mental health benefits from regular cycling – whether they were riding traditional pedal bikes or electric-assist models.” Spread the word far and wide.

02 09 26: “A 'Shark Tank' alum needed cash to pay tariffs. This shadowy lending world was ready.” National Public Radio npr: "‘Point me in the direction of what dollar amount you need, and we'll get it priced out and funded today!" It's Bella, it's Jake, it's Zevi — strangers offering quick cash to help Joshua Esnard's small business in North Carolina. ‘How does $350,000 sound? Or $768,000 and up to $900,000?’ Approval in an hour, they say, money in a day. ‘No gimmicks, Joshua. No hidden fees, No BS.’  Exceedingly urgent pitches have flooded small-business owners' inboxes since the middle of last year, when many of them scrounged for money to pay unexpected tariff bills. The same number calls three times in a row. When Esnard listens to music on his phone, the constant pings make it sound like a skipping CD. He installed a spam-call blocking app. His father started getting the pitches. ‘How many times do I need to text before we make this happen? I'm ready to deliver funding now.’ ‘Are you ignoring me ???’ For importers like Esnard, President Trump's global tariffs triggered an existential emergency. Their goods from suppliers in China, France or Vietnam were landing in ports of Los Angeles, Houston, New York, and New Jersey. But physically claiming these products suddenly required instant cash, tens of thousands of unbudgeted dollars. Some turned to a shady, largely unregulated corner of the financial world. This same industry had gone after struggling music venues during pandemic lockdowns and shops during the Great Recession. It offers lifelines that can turn into trip wires — now to a new market of desperate business owners. An unregulated ‘deep, dark well.’ A merchant cash advance, or MCA, is often compared to a payday loan for a business, because this money is quick, convenient, and costly. Technically, it's not a loan but a purchase of a company's future sales. The lender gives money up front and then takes a weekly or daily cut of receipts directly from the borrower's bank account until the debt is repaid and then some. This financing often fills a gap that banks don't, and it's chaotic. Predatory lenders and loan sharks offer merchant cash advances. So do Amazon and PayPal, with milder terms. Rohit Chopra, who investigated the industry as director of the Consumer Financial Protection Bureau before Trump fired him and most of the agency's staff, told NPR he'd found tactics that ‘would make a mobster blush.’" HPS ANALYSIS: The shadow lending world exposed in this article is very real. I can tell you from personal experience that I receive three to four calls per week from Merchant Cash Advance (MCA) firms stating that they are ready to immediately deposit anywhere from $125,000 to $250,000 in my bank account. All I have to do is agree to the terms. I hope that specialty bicycle retailers and industry suppliers read this and other related articles, and do not get involved with the shadow lending or dark money world to pay for import tariffs or inventory. 

02 10 26: “U.S. consumer delinquencies jump to highest in almost a decade.” Bloomberg: “Delinquency rates on loans ranging from mortgages to credit cards rose to 4.8 percent of all outstanding U.S. household debt in the fourth quarter, the highest level since 2017, driven by higher defaults among low-income and young borrowers. While the overall share of loans in some stage of default is near pre-pandemic averages, the rise in delinquencies among the lowest earners adds to evidence of an increasingly bifurcated economy, data from the Federal Reserve Bank of New York’s Quarterly Report on Household Debt and Credit released Tuesday showed. The rise in defaults was driven by delinquencies in mortgage payments, and New York Fed researchers found that they were particularly high in lower-income zip codes. Student-loan delinquencies, which have surged following a pause in payment requirements during the pandemic, also contributed to the rise in defaults, the researchers said.” HPS ANALYSIS: Some of this increase in defaults is attributable to slowly declining job loss, and some to the increased cost of new and used automobiles. Credit card debt is also increasing, contributing to delinquencies and defaults. Buy Now, Pay Later has become more popular in the last six to 10 months, and this is also the source of increased delinquencies and defaults. Specialty bicycle retailers need to sell as much merchandise as possible, and HPS can only advise on providing credit sources that do not involve or obligate the retailer in any way. This increase in delinquencies is another reason HPS is growing more concerned about the U.S. economy overall.

02 11 26: “Dick’s SG scores upgrade from Baird, eyes strong foot locker recovery potential.” SGB Media: “Baird has raised its rating on shares of Dick’s Sporting Goods, Inc. to ‘Outperform’ from ‘Neutral’ due in part to bullishness on a robust recovery of the recently acquired Foot Locker business. The upgrade comes as the investment firm transitioned coverage of Dick’s SG to its Active Lifestyle team, led by Jonathan Komp. The analyst also raised Baird’s price target on DKS shares to $253 from $230. Komp wrote, ‘We are impressed by Dick’s productivity gains vs. pre-COVID levels and bullish on the multi-year Foot Locker recovery (levered to NKE’s turn).’ Komp said he believes Dick’s has a ‘meaningful runway’ to grow its leading U.S. sporting goods market share, which he estimates is at 14 percent in a $14 billion total addressable market in the U.S. Macro growth drivers in the sporting goods category include continued gains for youth organized sports, continued increases in women’s sport participation, and adult recreational sports expansion. Komp wrote, ‘DKS has proven ability to drive effective merchandising, in-store and online experiences, strong service, and personalization.’” HPS ANALYSIS: HPS looks at this as good news, since Dicks Sporting Goods is the largest of the Specialty Sporting Goods retailers that sell bicycles, e-bikes, parts, accessories, and provide full repair services to customers. Baird’s raising its rating is one of the bright spots in the overall U.S. bicycle retail channels of trade. HPS has previously reported that Dicks Sporting Goods is planning to build and open several new store locations in the U.S. during 2026.

02 11 26: “Giant Bicycle continues strong DD sales declines to start 2026.” SGB Media: “Giant Manufacturing Co., Ltd. (Giant Group) reported another double-digit decline in bicycle shipment revenue for January 2026 as the trend accelerated against the declines for full-year 2025, the 2025 fourth quarter, and roughly double the decline posted in December. While the company has been on a downward trajectory since early 2023, any hopes of moving back into growth territory were dashed last September when the U.S. Customs and Border Patrol (CBP) cited the company for its labor practices at its factories in Southeast Asia. On September 24, 2025, CBP issued a Withhold Release Order (WRO) on products manufactured at Giant Group’s Taiwan-based manufacturing factory, suspending the import of Giant-branded bikes, bike parts, and components into the United States. Total 2025 full-year shipment revenue declined 15.4 percent to NT$60.3 billion ($1.93 billion). Giant Group reports in New Taiwan dollars (NT$). Conversions are based on the full-year conversion rate of 31.17 NT$ = 1 US$. The cadence for the year was explained in part to the uncertainty of U.S. tariffs, which pushed Giant Group and other Asian factories to get as many goods in containers and on the water as they could before President Trump’s so-called Independence Day in early April. The NT$3.7 billion shipped in January 2026 was the smallest volume since SGB Analytics started tracking in 2015.” HPS ANALYSIS: There appears to be no question that Giant Manufacturing Group (GMC) is struggling. Please take note of: “The cadence for the year was explained in part to the uncertainty of U.S. tariffs, which pushed Giant Group and other Asian factories to get as many goods in containers and on the water as they could before President Trump’s so-called Independence Day in early April.” Giant’s situation was complicated by the fourth quarter 2025 U.S. Customs embargo on goods shipped from GMC’s Taiwanese factories because of a labor dispute that still hasn’t been resolved. Overall, the rush to get imported containers of merchandise into the U.S. before the “Independence Day” IEEPA tariffs went into full force and effect resulted in excess inventory that resulted in discounting during the third and fourth quarters of 2025 and the first quarter of 2026, affecting Giant and all bicycle industry importers.  

02 11 26: “U.S. unexpectedly adds 130,000 jobs in January after a weak 2025.” National Public Radio npr: “Hiring grew a little warmer last month after a chilly year in 2025. A report from the Labor Department on Wednesday showed U.S. employers added a better-than-expected 130,000 jobs in January, but an annual update shows hiring last year was much weaker than initially reported. The news comes amid worries that the nation's jobs engine has been sputtering. Employment gains for November and December were revised down by a total of 17,000 jobs. Once a year, the Labor Department updates its jobs tally with more accurate but less timely information drawn from unemployment tax records. Wednesday's revision shows there were nearly 900,000 fewer jobs in the economy last March than originally counted. On average, employers added only 15,000 jobs a month in 2025. ‘This does not remotely look like a healthy labor market,’ Federal Reserve governor Chris Waller said in a statement anticipating the revision. Waller urged his central bank colleagues to cut their benchmark interest rate last month in an effort to prop up the sagging job market. But most Fed policymakers voted to hold rates steady in January, after three rate cuts last year. Health care and construction led way: Health care and construction were among the few industries that saw significant job gains in new workers. Manufacturing added 5,000 jobs while hospitality added just 1,000. The unemployment rate dipped to 4.3 percent from 4.4 percent the month before. That's quite low by historical standards. The unemployment rate among African Americans also fell, but remains elevated at 7.2 percent. Some of the weaknesses in job growth last year may reflect a drop in the number of available workers. The Trump administration has slammed the door on most people trying to enter the country, while aggressively deporting immigrants who have been living in the U.S. illegally. At the same time, many native born baby boomers are reaching retirement age and leaving the workforce. But Waller says that explains only part of what's weighing on the job market. ‘Employers are reluctant to fire workers, but also very reluctant to hire,’ Waller said in is statement. ‘This indicates to me that there is considerable doubt about future employment growth and suggests that a substantial deterioration in the labor market is a significant risk.’" HPS ANALYSIS: The 130,000 new jobs reported in January were a surprise and served to inject optimism into the economic numbers, as we have reported previously. Reports indicate that specialty bicycle retailers are struggling to maintain employment stability through the first quarter of 2026, with costs increasing and revenue flat or declining. This is a generality, so if you are a bike shop and your revenue is exceeding your costs, work to keep it that way. The job gains in January of this year were concentrated in health care and construction. The big question going forward is future employment and the availability of workers for entry-level and good-paying jobs in construction, agriculture, food processing and manufacturing. Keeping in mind that these are specialty bicycle retail customers, HPS has been advising bike shops to do everything to promote and increase service work, winter storage, and used bicycles and e-bikes for customers in their communities that might have tight budgets.

02 12 26: “Costs from Trump's tariffs paid almost entirely by U.S. consumers, NY Fed says.” British Broadcasting Corporation bbc: “As President Donald Trump changed tariff agreements with a number of countries, there was one constant: goods became more expensive for U.S. companies and consumers. In research released Thursday by the Federal Reserve Bank of New York, a group of analysts and economists found that in 2025, the average tariff rate on imported goods rose to 13 percent from just 2.6 percent at the start of the year. The New York Fed found that 90 percent of the cost of increased tariffs, which Trump imposed on goods from Mexico, China, Canada, and the European Union, was paid for by companies and often passed on to shoppers. U.S. firms and consumers continue to bear the bulk of the economic burden of the high tariffs imposed in 2025. As tariff rates changed and increased last year, exporting countries did not lower the cost of goods in an attempt to ward off any drop in U.S. demand. Instead, exporters kept their prices the same, passing off the cost of tariffs to any company importing their goods, which in turn responded by increasing the price of those goods to shoppers.” HPS ANALYSIS: I asked the question at the CABDA Midwest Expo Seminars, and found no one who believed import tariffs are paid by anyone other than the importer of record, and passed on to the ultimate consumer. This is not a difficult question if you work in an import-dependent business, like the American bicycle business. As this article points out, research done by the New York Federal Reserve confirms that tariffs are paid “…almost entirely by U.S. consumers.’ You will note that this research report did get the New York Fed economists in trouble with National Economic Council director Kevin Hassett.

02 13 26: “Shimano study reveals the hidden bottleneck in Europe's cycling boom.” Bike Europe: “Shimano started off 2026 by dropping its State of the Nation report, the first since it was discontinued in 2023. This report details the survey results from 25,000 Europeans across 25 nations, and highlights not only the consumer's cycling experience, but also a core shift in strategy for Shimano. In contrast to the company’s previous surveys, which were smaller and much more focused on economic factors and market volatility in the post-pandemic shakeout, this 2026 rendition has shifted its attention to cycling barriers and system resilience. It’s clear that the company’s three-year gap has given Shimano the opportunity to reframe the survey from a market snapshot to a more active tool, aligning with its broader advocacy goals. The survey also reveals something: maintenance is fast becoming a key barrier to long-term cycling adoption. ‘We see the State of the Nation as a baseline for the many things we do in advocacy,’ explains Ties van Dijk, advocacy specialist at Shimano Europe. ‘If we don’t know what the barriers are, whether they be infrastructure, kids not cycling, or a shortage of mechanics, then we don’t know what to advocate for. So this research really gives us the evidence we need to push for real change.’ According to the State of the Nation 2026, maintenance is now a primary barrier to cycling frequency and long-term ridership. Riders report that having problems accessing maintenance or repairs caused them to cycle much less often, up to 75 percent less frequently. Nearly 60 percent of younger respondents (ages 18-34) report being negatively affected by these barriers, compared with 40 percent of older folks. ‘For the cycling industry, this is a structural risk,’ the results state. ‘When keeping a bike running feels complex, expensive, or uncertain, participation erodes, regardless of infrastructure or intent.’ The role of mechanics: ‘Bicycle mechanics are the backbone of the cycling ecosystem,’ van Dijk said. ‘Their expertise is essential to every business model that keeps bicycles on the road — from independent shops to large-scale leasing fleets. Without them, we risk creating serious barriers for people who want to start or continue cycling. We are currently facing a critical and worsening shortage of skilled bicycle mechanics,’ van Dijk said. ‘What makes this even more concerning is the ongoing skill drain. Many experienced mechanics leave the industry, often replaced by untrained or uncertified individuals. This threatens the quality, reliability, and accessibility of bicycle maintenance.’” HPS ANALYSIS: This research and report, conducted and published by Shimano Europe, is absolutely fascinating, and leaves me with the question. Why hasn’t Shimano conducted identical research in North America? I fully intend to ask the Shimano executives attending the CABDA West Expo this question. I am sure there are more findings in the full report, but two that caught my eye in this article: (1) Bicycle mechanics are the backbone of the cycling ecosystem, and (2) maintenance is now a primary barrier to cycling frequency and long-term ridership. Let me know what you think. 

02 14 26: “The economy may have stuck the soft landing. Nobody wants to jinx it.” The Wall Street Journal: “The vital signs of the American economy are pointing in the same, favorable direction more convincingly than at any point since before the pandemic. Inflation is falling. The labor market is holding. Growth has been solid. It is a snapshot, not a verdict — but it is the closest the economy has come to achieving a soft landing, a moderation in inflation without recession. Just four years ago, many economists said that it was impossible. This past April, as the economy closed in on a soft landing, steep tariffs had forecasters bracing for a new surge in inflation. Now, it again looks plausible that inflation could return to the Federal Reserve’s 2 percent goal without a recession. Friday’s inflation report showed so-called core prices, which strip out volatile food and energy costs, rose 2.5 percent in January from a year earlier—the lowest since the pandemic price surge began in 2021. While that number has been held down artificially by a data gap from last fall’s government shutdown, it nonetheless showed less of the start-of-the-year price pressure that tripped up the falling-inflation story in each of the past three years. Meanwhile, separate data on Wednesday showed the unemployment rate ticked down to 4.3 percent in January, with employers adding a larger-than-anticipated 130,000 jobs. ‘The worst calamity that everyone had in mind didn’t happen,’ said Jeffrey Cleveland, chief economist at Payden & Rygel. ‘People would say to me, ‘The only way you’ll get to 2 percent inflation is the unemployment rate has to spike.’ Even if oxygen masks weren’t needed, it is too soon to remove the seat belts. Core prices as measured by the Fed’s preferred inflation gauge, which differs from the consumer-price index released Friday, are rising nearly 3 percent, up from the recent low of 2.6 percent recorded this past April and well above the 2 percent target. Several forecasters expect little progress this year as tariff-related price increases work their way from ports to store shelves.” HPS ANALYSIS: Economists started talking about a “soft landing” during the Biden Administration. Has the U.S. economy actually made a soft landing? Despite all the numbers and economic jargon – it seems possible, but as this article opines: “Even if oxygen masks weren’t needed, it is too soon to remove the seat belts.” Since we are still gliding, I for one would like to see the effect of the tariff-related price increases as they work there way through to store shelves, or “seep” into supply chain pricing.

02 16 26: “Giant Group founder King Liu passes away at age 93” Bicycle Retailer and Industry News: “Giant Group founder King Liu died Monday at the age of 93. Liu founded Giant in Taiwan in 1972 and co-founded Giant Manufacturing Co., Ltd., and eight years later built it into the largest bike manufacturer in the country and second largest in Asia. According to a Giant Group news release, ‘Liu devoted himself to bicycles, believing they represented not merely a business, but a meaningful way of life. He was widely respected as a lifelong advocate for cycling culture and remained a deeply influential figure to colleagues, partners, and riders across generations’." HPS ANALYSIS: I first met King Liu in 1979, and had known Tony Lo for several years before that. He was extraordinary, both for his vision and his patience. He was very kind to me, both as a young Schwinn Bicycle Company manager, and later, as an independent consultant seeking his blessing for a project. I know he is riding the Fire Horse.

02 16 26: “Vosper: The missing link is dealer trust.” Bicycle Retailer and Industry News: BRAIN Editorial by Rick Vosper: “As the Bike 4.0 dynamic continues to evolve, one side effect is that dealer trust is eroding. In fact, from where I sit, retailer trust is at an all-time low with some large suppliers, based on my 40-odd years in and out of the bike business. When I talk to dealers, more and more I hear suppliers referred to as ‘competitors,’ or even as ‘the enemy.’ And to be sure, part of the Bike 4.0 dynamic is what I call the ‘channel-agnostic marketplace,’ in which cycling products are available through a variety of channels, not just brick-and-mortar retail. And virtually all suppliers now sell consumer-direct. Also, three out of four of the Quadrumviate brands — Trek, Specialized, and Pon/Cannondale — now operate chains of retail businesses, many hundreds of locations, which compete directly with local retailers in each market area. At the same time, suppliers have cut back on lines of communication with dealers. Whether the result of layoffs, ‘consolidated’ sales rep territories, or just reduced contact with individual dealers, many suppliers are ‘going dark’ with increasing numbers of independent bicycle retailers. The net result of this trend is not zero, despite what some corporate bean-counters may pontificate. At the end of the day, less dealer trust means fewer dealer sales, which still compromises 90 percent more of revenue for some brands. To be sure, the effects are subtle and hard to notice. Bike inventory may be replaced with a competing brand. Overall order volume shrinks as dealers choose to inventory less product. Re-order trigger levels may become lower. Retailers may go in search of alternative suppliers for generic items. But it all impacts the bottom line.” HPS ANALYSIS: Rick has done his usual excellent job with this article, which I highly recommend to all of our readers. What Rick says should be studied carefully by CEOs of brands and companies, large and small, in the American bicycle business. Trust is hard won and not given lightly. Rick is correct, as usual: “…dealer trust is eroding.” There are two things that specialty bicycle retailers need to hear, believe, and pass on to their employees, customers, and their community: the truth and trust.

02 18 26: “KKR loses billions in Accell Group’s debt restructuring.” SGB Media: “Netherlands-based Accell Group announced a restructuring that will see its equity holders, led by U.S. private-equity giant Kohlberg Kravis Roberts & Co. (KKR), hand over their shares to senior lenders in exchange for new funding and a substantial debt reduction. A consortium led by KKR and Teslin Alpine Acquisition in 2022 acquired Accell, whose bike brands also include Haibike, Winora, Ghost, Batavus, Koga, Lapierre, Raleigh, Sparta, Babboe, and Carqon, for Є1.56 billion ($1.77 bn). Accell’S P&A brand is XLC, a manufacturer of bike parts and accessories. The purchase was made amid a cycling boom spurred by the pandemic, feeding expectations of continued strong long-term fundamentals in sustainable mobility and increasing e-bike adoption across Europe. However, a global slowdown in demand for road bikes and e-bikes arrived, and cycling’s recovery has been exacerbated by pandemic-related supply chain challenges that led to elevated inventory levels. The restructuring is the second for Accell in less than two years. In October 2024, Accell announced a major debt restructuring to address severe financial distress, cutting debt by 40 percent to €800 million from €1.4 billion and extending maturities to 2030. The deal, initiated after weak 2024 sales and a Babboe bike recall, included €235 million in fresh funding from lenders and an initial equity conversion by KKR and took effect in the first quarter of 2025. Accell’s sales fell 22 percent in 2024 due to extensive discounting in the bike space after an 11 percent decline in 2023.” HPS ANALYSIS: The simple fact that “KKR loses billions in Accell Group’s debt restructuring” is stunning. KKR just doesn’t do that (lose billions). HPS has collected and read several articles about the Accell Group financial restructuring, and KKR and the other equity holders in Accell Group are handing over their shares, and walking away. I can read this article, and others, and still not see in black and white that KKR has lost billions, and I presume it is writing the loss off. What I would really like to know is why. What does KKR see, or not see, that brought it to a decision to lose, and write off billions? What does this mean to the European and global bicycle industry?

02 18 26: “Trump adviser calls for Fed economists to be 'disciplined.’” British Broadcasting Corporation bbc: “ One of Donald Trump's most senior economic advisers has said a group of economists should be ‘disciplined’ for a Federal Reserve study which argued that U.S. firms and consumers have borne the brunt of the president's tariffs. National Economic Council director Kevin Hassett said the report, published by the New York Federal Reserve, was ‘an embarrassment’ and ‘the worst paper I've ever seen in the history of the Federal Reserve system.” It found that last year, 90 percent of the cost of increased tariffs was paid for by U.S. companies and shoppers. Hassett's comments to CNBC are the latest attack by the Trump administration on the Federal Reserve, which has, until now, been focused on interest rates. The paper by the New York Fed was released as the U.S. Supreme Court weighs a legal challenge to Trump's sweeping global tariffs. ‘U.S. firms and consumers continue to bear the bulk of the economic burden of the high tariffs imposed in 2025, it said.’ Hassett, who is director of the National Economic Council, said that prices had fallen, inflation was lower, and ‘real wages were up $1,400 on average last year, which means that consumers were made better off by the tariffs.’ He told CNBC: ‘The people associated with this paper should presumably be disciplined, because what they've done is they've put out a conclusion which has created a lot of news that's highly partisan based on analysis that wouldn't be accepted in a first-semester econ class.’ The New York Fed declined to comment. Its findings align with other recent tariff analyses. The Kiel Institute for the World Economy, an independent research firm in Germany, said in a report last month that it had found ‘near-complete pass-through of tariffs to U.S. import prices.’ The National Bureau of Economic Research also found that the pass-through of tariffs was ‘almost 100 percent, meaning the U.S., not the countries exporting goods to America, is paying for the increase in prices.” HPS ANALYSIS: Yikes! “National Economic Council director Kevin Hassett said the report, published by the New York Federal Reserve, was "an embarrassment" and "the worst paper I've ever seen in the history of the Federal Reserve system". Kevin Hassett clearly didn’t like the New York Federal Reserve report that makes it clear that U.S. tariffs are paid by the importers of record and passed along to U.S. consumers in the pricing of goods and merchandise. HPS thanks the Federal Reserve for having the courage of their convictions to hold to the truth.

02 19 26: “New California bill to require license plates for electric bikes.” electrek: “A newly introduced bill in California could dramatically change how electric bikes are treated under state law, and it may put license plates on most e-bikes. Assembly Bill 1942, introduced by Assemblywoman Rebecca Bauer-Kahan, would require all Class 2 and Class 3 electric bicycles to be registered with the California Department of Motor Vehicles and to display a special license plate issued by the DMV. Under current California law, e-bikes are divided into three classes: Class 1 (pedal assist up to 20 mph or 32 km/h), Class 2 (throttle-equipped up to 20 mph or 32 km/h), and Class 3 (pedal assist up to 28 mph or 45 km/h). These classifications, established nearly a decade ago, were specifically designed to treat e-bikes more like bicycles than motor vehicles. That means no registration, no insurance, and no license plates – one of the key reasons e-bikes have become such an accessible alternative to driving. They’re as hassle-free as a bicycle while being easier to ride. AB 1942 would change that for Class 2 and Class 3 models, which make up likely over 90 percent of the road-legal electric bikes in the state. Riders would need to register their bikes, obtain a plate, and carry proof of ownership tied to the bike’s serial number. Operating a Class 2 or 3 e-bike without registration would become an infraction punishable by fines. The bill would also create an Electric Bicycle Registration Fund to collect fees and fund the administration of the program. E-bike license plates are required in some countries, but are still a foreign concept in the U.S.. The bill, while still in committee with a ways to go before potentially becoming law, joins a growing trend towards e-bike crackdowns in many states. Supporters argue the California bill is about accountability and public safety, pointing to rising concerns about reckless riding and injuries. But here’s the rub: this proposal doesn’t just target illegal, high-powered “e-motos” or modified bikes that exceed the 750-watt limit. It applies to fully legal class 2 and class 3 e-bikes – the same commuter bikes used by parents, students, and delivery workers across the state. These are fully legal electric bicycles that have always been legally considered bicycles, not vehicles.” HPS ANALYSIS: The infection started with the New Jersey law has spread to California, and unless the American bicycle industry changes its strategy and tactics, this will only be the beginning of similar bills in more state legislatures. How can I be sure? Because HPS has witnessed and opposed this kind of state legislation before. Industry-wide alignment on definitions and consumer safety is essential, along with the funding required for success. 

02 19 26: “Walmart’s cautious outlook reflects uneven state of U.S. economy.” Bloomberg: “Walmart Inc. forecast less growth in earnings this year than Wall Street was expecting, citing the need for flexibility in unpredictable times for consumers. The world’s largest retailer said it expects adjusted earnings to rise to between $2.75 and $2.85 per share this fiscal year. Analysts on average were expecting profit to jump to $2.97 per share. Walmart’s conservatism reflects the unusual state of the U.S. economy, which is expanding at a solid clip but seeing little employment growth. New Chief Executive Officer John Furner aims to keep gaining market share by keeping prices low and continuing momentum in online delivery services. ‘We think it’s prudent to be somewhat measured with the outlook right now as we have been,’ chief financial officer John David Rainey said in an interview with Bloomberg News. Walmart shares rose 2.5 percent at 9:32 a.m. Thursday in New York, reversing declines in earlier premarket trading. The stock gained 14 percent this year through Wednesday’s close, outpacing the S&P 500 Index. Walmart typically offers conservative guidance at the start of the year, then raises its outlook in the following quarters. ‘There’s a whole lot of the year to go in what’s still a pretty fluid, dynamic macro backdrop,’ Rainey said, citing slow hiring, trade uncertainty, and other factors. The company has outperformed its outlook in recent years and expects to do so in 2026, he added. Walmart is often viewed as a barometer for the broader economy due to its massive size and wide reach. Consumers’ spending habits have remained consistent, though the spending gap between the highest and lowest-income cohorts persisted during the latest quarter, Rainey said. Prices rose just over 1 percent in the U.S. in recent months, with grocery prices rising at a lower rate. ‘As we look into the coming quarter as well as the coming year, it feels a little bit more like a normalized pricing environment,’ Rainey said. Tariff-driven inflation has reached or is reaching its peak, he said.” HPS ANALYSIS: The executive management team at Walmart, now the second largest corporation after Amazon, just got changed at the beginning of February, but the new team is seasoned veterans of the Walmart corporate structure and Mr. Sam’s philosophies. What is of interest to HPS about this, the largest retailer of bicycles, is that it is cautious and leans toward being conservative when it comes to the economy and its financial projections. So, in tabling a forecast of less growth in earnings this year than Wall Street was expecting, it is citing the need for flexibility in unpredictable times for consumers, reflecting the unusual state of the U.S. economy, which is expanding at a solid clip but seeing little employment growth.  

02 20 26 “In rare rebuke of Trump, Supreme Court strikes down tariffs.” The Washington Post: “The Supreme Court on Friday struck down most of President Donald Trump’s sweeping tariffs, a ruling that deals a major blow to his signature economic policy and represents a stinging political setback. In a 6-3 decision, the justices ruled the president did not have the authority under a 1977 emergency economic powers law to impose import levies on goods from nearly all of the nation’s trading partners. The decision is expected to reverberate widely, affecting global trade, consumers, companies, inflation, and the pocketbooks of every American. Democrats press Trump administration to issue tariff refunds: Sen. Jeanne Shaheen (D-New Hampshire) has urged the Trump administration to ‘pay refunds of these unlawfully collected tariffs.’ (Demetrius Freeman/The Washington Post). ‘Some Democrats have started calling for the Trump administration to issue refunds now that the Supreme Court has struck down most of the president’s sweeping tariffs, although the court’s ruling Friday did not address whether that would happen.’ Many Trump tariffs are unaffected by today’s Supreme Court ruling: Friday’s Supreme Court decision that invalidates President Donald Trump’s IEEPA tariffs leaves untouched several other types of import taxes. The government has raised tens of billions of dollars over the past year through tariffs on goods including solar panels, steel and aluminum, automobiles, copper, and made-in-China items. The court’s decision to strike down tariffs sets up a tense State of the Union address, which President Donald Trump is set to deliver before a joint session of Congress on Tuesday. Trump has frequently spoken about ‘tariff’ being ‘the most beautiful word in the dictionary’ and boasted about wielding levies to achieve his economic and foreign-policy goals. The Supreme Court will be in session next week, so the justices could have waited until after the State of the Union address to issue its tariffs ruling.” HPS ANALYSIS: And so, on Tuesday, February 20, 2026, the U.S. Supreme Court handed down a decision that should have been no real surprise to plaintiffs or the defendant. By a 6-3 majority, also predicable, based on the questions from the bench during oral arguments, the IEEPA tariffs, representing about half of all the applicable tariffs in full force and effect on this date, were declared illegal and struck down. In its decision, the court left it to the lower court, the Court of International Trade, to decide on refunds. HPS still holds the opinion that, based on what we know about the current chaos, very few, if any, refunds will be forthcoming after a protracted and expensive process that will probably involve litigation.  

02 24 26: “These small business owners are owed tariff refunds. Will they ever get them?” National Public Radio npr: “Ask anyone selling anything in the U.S. right now, and they'll probably say they want their tariff money back. ‘How do we get a refund?’ said Alfred Mai, whose San Francisco firm ASM Games makes card games in China and, by his estimates, paid more than $150,000 in tariffs that the U.S. Supreme Court on Friday declared unconstitutional. ‘Where do I go to get a refund?’ Since the court ruling striking down about half of President Trump's tariffs, importers and retailers have been calling, texting, and emailing almost nonstop — each other, their trade groups, and any lawyer on tap — asking these questions. Some raised an alarm when U.S. Customs continued to charge those very tariffs for days after the Supreme Court declared them unconstitutional. Customs and Border Protection later said it would stop collecting these tariffs on Tuesday. The tariffs that the Supreme Court struck down amounted to around $130 billion. Anyone who paid the taxes should get reimbursed. But the high court did not address how. ‘We not only need the money back,’ said Sarah Wells from Virginia, who sells backpacks and totes for breast pumps, for new moms, ‘but we need a process to get the money back that doesn't involve lawyers, really time-consuming paperwork, expensive processes — none of us have the bandwidth or the resources to do that.’ Indeed, the government already has a routine process to refund tariffs in cases of, say, errors on a customs form. But on Monday, Wells dialed into a call arranged by the small-business group Main Street Alliance and heard lawyers suggest that this time, getting her money back would likely require suing the government. ‘I'm so frustrated that there isn't clear guidance that would make it easier on small businesses,’ Wells said afterward. ‘We shouldn't have to become litigators just to get our money back.’” HPS ANALYSIS: There is much more to read about this very sad and uncertain set of circumstances, but more input only adds to the radical uncertainty surrounding the probability of mid- to small-sized importers of record actually receiving all or a portion of the IEEPA tariffs paid to Customs and Border Protection (CBP). What is clearer is that the Administration will use its statutory authority to impose tariffs to replace the IEEPA tariffs that have been struck down. That statutory authority includes Section 232 of the Threat to National Security, Section 201 of the Injury to Domestic Industry, Section 301 of the Discrimination Against U.S. Businesses or violation of U.S. rights under trade agreements, Section 122 of the International Payments Problem, or Section 338 of the Discrimination Against U.S. Commerce. Accordingly, Section 122 has already been incorporated into an executive order replacing some of the IEEPA tariffs at 15 percent, which are limited to 150 days, and can be extended with Congressional approval. The administration has made it clear that it believes it does not have to go to Congress to implement tariffs under any or all of these statutory authorities, which could lead to additional litigation down the road.   

02 25 26: “Why prices won't drop after the Trump tariff ruling, according to economists.” National Public Radio npr: “Consumers likely won't see cheaper prices at the grocery store or shopping mall, economists say, despite the Supreme Court striking down many of President Trump's tariffs. There are a couple of reasons why. For one, the president has many tools to impose tariffs, and the court decision last week only deemed one of them unconstitutional. Within hours of the ruling, Trump said he was using a different law to reimpose taxes on global imports. ‘The administration's made it very clear that they are not turning away from tariffs,’ says Mary Lovely, a senior fellow at the Peterson Institute for International Economics. Stuck prices: Another reason customers are unlikely to see substantial price changes at the store is that, in general, prices take time to adjust. It's a concept of ‘sticky prices.’ It happens when ‘prices change more slowly than the underlying fundamental factors that go into pricing,’ Lovely says. A common example involves restaurants: if the price of one ingredient goes up, the restaurant might want to wait a bit before printing new menus that show a higher price for the dish, just in case the cost of ingredients changes again. Even with tariffs on hold, higher prices likely will stick around, economists say: Prices can be sticky in either the high or low direction. But in this case, tariffs have led to higher prices for consumers, and they could stay that way. The companies that have raised prices in response to tariffs are finding out whether consumers were willing to pay more for stuff all along. The tariffs have essentially been ‘a broad set of experiments, which will reveal to suppliers if their previous prices were profit maximizing or too low,’ marketing professor emeritus at Harvard Business School Robert Dolan told NPR last year. Suppliers may keep prices high if people keep paying, tariffs or not. Also, many businesses, especially medium-sized businesses, are still catching up to tariffs and adjusting how much of the cost they are passing on to customers, Lovely says. Some had stockpiled inventory ahead of tariffs. ‘They haven't been able to pass it through completely yet, waiting to see what would happen,’ she says. ‘So they're going to be highly reluctant to roll back when they're still in the process of catching up.’” HPS ANALYSIS: In addition to the refund of the IEEPA tariffs, and the possibility of all or a part of those refunds being given back to each of the steps in the supply chain, there is also the hope that prices that have increased due to paying tariffs will be reduced if tariffs are refunded. This article explains why some economists do not believe prices will be reduced, even if refunds are forthcoming. HPS agrees with the assessment made by this article. There will be no appreciable reductions in end-user or consumer prices as a result of either tariff refunds or the eventual elimination of tariffs. 

Contact Jay Townley: jay@humanpoweredsolutions.com