TARIFF REFUNDS, E-BIKE INJURIES, AND THE RISING COST OF MONEY

By Jay Townley

08 17 26: “Taiwan-based Johnson Health Tech sees U.S. tariff rebate lift Q2 margins.” Sporting Goods Business SGB Media: “It appears that even a Taiwan-based company like Johnson Health Tech can see the upside from the SCOTUS ruling this past spring that reversed the Trump Administration’s IEEPA tariffs that were imposed on goods imported to the U.S. from over 60 trading partner countries. While a number of U.S.-based companies in the active lifestyle market have seen benefits this year from tariff rebates running into the millions of dollars due to the SCOTUS ruling, the Q2 earnings report from the fitness equipment maker may be one of the biggest examples of spreading the wealth back overseas from subsidiaries in the U.S. Johnson Health Tech .Co., Ltd. (Group), owner of the BowFlex, Fujiiryoki, Horizon Fitness, Johnson Fitness & Wellness, JRNY, Matrix, Schwinn, Synca Wellness, and Vision Fitness brands, was able to tap into tariffs rebates of ~$42 million to boost margins and pad the bottom line. Johnson Health Tech reports in the New Taiwan dollar (NT$) currency. Conversions to the U.S. dollar ($) currency was calculated by SGB Executive at the average rate of 1 NT$ to 0.0316 U.S. dollars as published by the Federal Reserve of St. Louis for both the second quarter and the month of July. The company reported second-quarter revenue grew 7.8 percent to NT$13.3 billion (~$419 mm), compared to NT$12.3 billion in the prior-year Q2 period. The Home segment saw 80 percent of its revenue come from the U.S., while the Commercial segment derived 40 percent of revenue from the U.S. Europe added another nearly 40 percent.” HPS ANALYSIS: The just-published NBDA Cost Of Doing Business Study shows that specialty bicycle retailer sales of fitness equipment are currently so small that it is reported as “0.” This was not always the case. Fitness equipment was, in the late 1990s, the most profitable product category of the Schwinn Bicycle Company and the company’s authorized dealers. The Schwinn brand of fitness equipment, along with BowFlex, was eventually sold to Johnson Fitness Health Tech, the subject of this article. The historical fact is that it was Schwinn that introduced fitness equipment to bicycle dealers as a winter business for both its factory in Chicago and its dealers throughout the country. This article highlights the U.S. tariff impact on fitness products imported into the country and, HPS thinks, suggests a product category that the bicycle business may want to explore bringing back to expand product offerings, cash flow, and profitability.

08 19 26: “Child e-bike injuries have skyrocketed across Mass., ER doctors warn.” WBUR: “On a hot June afternoon in Hingham, the 5-year-old boy pedaled down the driveway and turned onto the sidewalk. His mother, Meaghan Rogers, heard the collision from the garage. ‘It sounded like a car crash,’ said Rogers. ‘That's how hard the impact was.’ A teenager on an electric-powered bike had collided with Bode. Rogers ran outside and found her son pinned under the heavy e-bike. She called 911. ‘Right away, we knew he was hurt. He couldn’t feel his arm,’ Rogers said. Bode’s helmet had cracked, and his arm had shattered, requiring several surgeries and a five-inch pin. Another operation is scheduled next month. Bode's injury is part of a dramatic spike in children hurt in e-bike and electric scooter crashes across Massachusetts this summer. Doctors say the injuries are often far more severe than pedal bike crashes. ‘We've seen so many catastrophic TBIs — traumatic brain injuries — in children who are riding or being hit by these things, or being hit by a car because they're riding in high-speed traffic and they don't know the rules of the road,’ said Dr. Cornelia Griggs, a pediatric surgeon at Mass General Brigham for Children. As e-bike injuries mount, emergency department doctors, police and town officials are pushing for tougher rules and clearer guidelines from the state on age requirements and speed limits. ‘The kids riding them are younger than the age of having a [driver’s] license, so they haven't learned all of the road regulations and safety,’ she said. ‘We shouldn't wait until something really bad happens to do something.’ ERs sound alarm over kids hurt by e-bikes: Physicians at some of the state’s largest pediatric trauma centers told WBUR they’re alarmed by the sharp increase in serious injuries from electric bikes and scooters. Dr. Errol Mortimer, a pediatric orthopedic surgeon at UMass Memorial Medical Center in Worcester, estimated ‘close to a tenfold increase’ in ER visits for children hurt by e-bikes over last year.” HPS ANALYSIS: This article is an example of the news coverage that e-motos mistaken for e-bikes, and e-bikes themselves, are getting in too many states around the country. The accidents, injuries, and fatalities are sadly very real, along with the uneducated and too often emotional, knee-jerk reaction to the safety problem that has been created. Too often we are witnessing specialty bicycle retailers being punished by hastily passed municipal and/or state laws and regulations that harm small businesses instead of making roads and communities safer for riders and consumers of all ages. The industry needs to step up and take responsibility for crafting and promoting Safety First and educating children, adults, parents, law enforcement, and government about safe products that are safely operated and responsibly integrated into society for the benefit of individuals and communities.  

08 19 26: “NBDA releases 2026 Cost of Doing Business Study, giving specialty bicycle retailers the industry's most important financial benchmark.” Bicycle Retailer and Industry News BRAIN: “The National Bicycle Dealers Association (NBDA) today announced the release of the 2026 Cost of Doing Business (CODB) Study, the bicycle industry's most comprehensive financial benchmarking report for specialty bicycle retailers. Compiled from confidential financial data submitted by retailers across North America, the 2026 study reflects business performance for the 2025 calendar year and provides bicycle retailers with an unparalleled opportunity to compare their financial and operational performance with that of similar businesses across the industry. The NBDA Cost of Doing Business Study remains the definitive financial resource for specialty bicycle retailers seeking to improve profitability, strengthen operations, and make better-informed business decisions. The report allows retailers to benchmark their business against stores by revenue size, geographic region, number of locations, store type, and the industry's highest-performing retailers. ‘This report is one of the most valuable business tools we provide our members,’ said Heather Mason, executive director of the National Bicycle Dealers Association. ‘Too many retailers make important business decisions based on instinct alone. The Cost of Doing Business Study replaces guesswork with real industry data. It gives retailers the ability to see where they are outperforming their peers, where opportunities exist, and where they should focus their time and resources. If you're serious about building a stronger, more profitable bicycle business, this report should be on your desk and used for setting KPI standards.’" HPS ANALYSIS: I feel compelled to set the record straight. The cover of the current Cost of Doing Business Study states: “2025 Cost of Doing Business Study.” As this article states, “…the 2026 study reflects business performance for the 2025 calendar year.” With that said, this is the most important financial study for specialty bicycle retailers, which allows them to compare their financial results to a national sample and determine the goals and benchmarks for their business performance going forward. The NBDA produced a webinar on Monday, September 14, featuring Michael Forte, Wheelhouse Consulting. Michael has been a specialty bicycle retailer and has worked as a data analyst for Giant, Felt, and Specialized. He also advised the NBDA on the retailer questionnaire used for the current CODB Study, and HPS recommends using the YouTube recording of this webinar as a companion to reading and utilizing a copy of the study.

08 19 26: “U.S. retail giant receives $1bn boost from tariff refunds.” BRITISH BROADCASTING CORPORATION bbc: “The American chain said it received a $994 million pre-tax reimbursement, which resulted in its second quarter operating income doubling to $2.6bn from $1.3bn last year. Target is the latest of many businesses, both large and small, being given tax rebates on goods imported to the U.S. following a Supreme Court ruling that declared a wave of President Donald Trump's import tariffs were unlawful. However, Trump has continued to impose duties on goods coming into the U.S. through different legal means, meaning many companies still face extra taxes. The president announced on Monday he would delay the introduction of a raft of new import taxes on various Canadian goods for three days as negotiations over a trade deal continue. Trump has threatened to impose a 50 percent levy on nearly $20bn (C$28bn) worth of imports from Canada. The two sides have been at an impasse on several issues, including U.S. tariffs on autos and many Canadian provinces banning American liquor sales. The president has used and threatened tariffs on dozens of countries since he returned to the White House last year. He has argued the trade policy will boost American manufacturing and jobs as businesses either source goods domestically or shift operations to the U.S. But economists have warned prices for consumers can rise as businesses, which pay the tax when importing goods, pass on the extra cost to customers.” HPS ANALYSIS: We commented on the unintended consequences of tariffs in last month’s edition, and they continue. As this article states, Target has received $994 million in pre-tax reimbursement so far and has basically said the money will be booked as earnings. While this doesn’t mean that the tariff refund will not support price reductions to consumer pricing, it doesn’t mean that they will either. As HPS has documented, the administration’s import tariffs have been, for the most part, passed along to American consumers as price increases. U.S. courts have found the tariffs to be illegal and have ordered Customs to refund the tariffs to the importers of record, or IORs. The IORs are, as we will see, between a rock and a hard place, and the vast majority have no way to determine who the consumers are who purchased the goods at the prices that had tariffs mixed in. The end result is that IORs are keeping and booking the refunded tariffs as income, while consumers pay inflated prices. As we will also see, this inflationary cycle, with its unintended consequences, will continue.

08 20 26: “Como mayor hit by electric bike and issues blanket ban in Italian city.” British Broadcasting Corporation bbc: “Como sits alongside several other historic towns overlooking the famous lake. The mayor of Como has banned riding bicycles in certain areas of the historic Italian city after he was hit by an electric one. Alessandro Rapinese said the ban was necessary to improve public safety. It means that from September, cyclists will have to dismount through an area of around 30 streets. He told Italian news agency Ansa: ‘People act based on their own experiences and I know what it's like to be hit by one of these beasts.’ Several other local authorities around Europe, including in the UK, have restricted where and how e-bikes and other single-person vehicles can be used. The measure put forward by Rapinese is part of a package of new traffic regulations, establishing a Limited Traffic Zone (ZTL) to manage tourist growth, and which impose stricter rules on cars and vans in the city centre. Many of the roads covered by the ban are the widest in the old town and are popular with delivery drivers. The measure applies to both electric and push bikes, as the Italian highway code does not distinguish between models.” HPS ANALYSIS: We think this story from Italy makes it clear that Europe is experiencing many of the same issues the U.S. is, relative to e-motos being misrepresented as e-bikes and e-bikes being used in an unsafe manner, endangering the public. The Italian mayor of Como actually isn’t seriously injured by an e-bike that is ridden irresponsibly, but the over-reaction and throwing-the-baby-out-with-the-bathwater ordinance that leaves law enforcement scratching their heads seems to be universal, and HPS wouldn’t doubt the same scenario is playing out in China. The answer, it seems to us, is a strong testing and certification global campaign.  

08 20 26: “The bond market is signaling trouble ahead. This is why you should pay attention.” National Public Radio npr: “If you know one thing about bonds, know this: A sharp sell-off is shaking the bond market, and it has big implications for both the economy and your pocketbook. To understand why the sell-off matters, it helps to understand how bond markets work — and why they are sounding alarm bells about the U.S. government's record-shattering debt levels and the path for inflation. Here's a simple and handy guide to make sense of what's going on. How do bond markets actually work? Bonds are essentially like loans. The U.S. government — like just about any other government in the world — needs to borrow money to afford all its spending, including spending on federal employee salaries and Pentagon projects. So to raise money, the U.S. government regularly sells bonds to a wide range of investors, from banks to other countries to individual people. (Companies also sell bonds; those are called corporate bonds.) And just like banks charge you an interest rate when lending you money to use for a credit card or when offering you a mortgage, investors expect to be paid interest in exchange for lending their money to the U.S. government. In market talk, that interest rate paid by the government is called the bond yield. Bonds can fluctuate in value. It's a simple rule: Bond prices and yields move in opposite directions from each other. And that can also affect the amount of interest the government has to pay on future bonds it issues. The reason is that if bond prices fall — like they are now — investors demand to be paid more in interest as additional compensation. And vice versa. If bond prices are rising, investors are fine getting less in interest since they are holding bonds that are appreciating in value. It's not too different from how a financial firm could decide to charge you a higher interest rate for a loan if it's worried about your ability to pay it back — or to lower your interest rate if it feels you are a good customer who's always on top of their bills. Why are bond prices falling? In a very simplistic way, bond prices are falling these days because investors are mainly concerned about two things. First, rising inflation is making the bonds they are holding worth less. Second, the U.S. government, under successive presidents, has had a habit of spending more money than it collects in taxes. Imagine suffering a pay cut without trimming back your expenses. I'm not a Wall Street investor. Why should I care? Bonds are critical to the economy because they influence interest rates that people pay on many things. What matters most is the bond yield. Effectively, the interest rates paid by the government for its bonds become a useful benchmark for banks and other financial firms when they decide how much to charge for their own loans to customers. That's why hikes in bond yields can reverberate across the economy.” HPS ANALYSIS: A specialty bicycle retailer said in an NBDA webinar this past week: “…the era of cheap money is over.” His point is that the cost of money, the interest on loans, has and will continue to increase. That is the issue for specialty bicycle retailers in a nutshell. This long article is well worth your reading because it clarifies what the retailer said – the era of cheap money is over. Retailers, as well as their suppliers, are going to find it harder to find money. When they do, that money is going to cost more.

08 20 26: “Three things to know about the $40 trillion federal debt.” National Public Radio npr: “The federal debt topped $40 trillion for the first time this week. Investors who buy government bonds are demanding higher interest rates to finance the growing debt load. The Treasury Department reported this week that the U.S. federal debt had reached $40 trillion, an eye-popping level of red ink. Just the annual interest on that accumulated debt now tops a trillion dollars, making it the government's second-biggest expense, behind only Social Security. Here are three things to know about the deepening financial hole the government is in. How did the debt get so big? For years, the government has spent more money than it collects in taxes. Some of that has been driven by political choices — to wage war, cut taxes, or provide a more generous social safety net during the pandemic. But much of the growth in spending happens automatically, as baby boomers age into retirement, resulting in higher costs for Social Security and Medicare. Historically, debt as a share of the economy tended to rise during recessions, then stabilize during economic expansions. More recently, the government has run large deficits even when the economy has been growing. The debt has doubled in size since 2017. And now the people who lend money to the government are demanding higher interest rates. How does this affect me? The federal debt affects all Americans indirectly, because it limits the government's ability to tackle other priorities. But it also affects some people more directly, by making it more expensive to borrow money. ‘When the government borrows this much, and the rates for Treasuries go up, that brings up the rates for everything else, from mortgages to car loans to credit cards,’ says Michael Peterson, CEO of the Peter G. Peterson Foundation, which advocates for fiscal responsibility. Mortgage rates, for example, tend to rise and fall with the yield on 10-year Treasuries, and the rate on 30-year home loans has climbed near 6.7 percent, according to Freddie Mac. Is anyone in Washington working to address the debt? The Treasury Department has taken steps to limit the increase in long-term bond yields. Yields fell on Wednesday after Treasury Secretary Scott Bessent announced the department would increase its buy-back program for government bonds. But the move does nothing to solve the underlying problem, and the effect was short-lived; The yields on 10- and 30-year Treasuries rebounded on Thursday. Earlier, the Treasury had taken steps to prop up the Japanese yen, so Japan would not be tempted to sell some of its own U.S. Treasuries. (Buying bonds pushes yields down, while selling pushes yields up.) Ultimately, Congress will have to raise taxes, cut spending or — most likely — do both. While some lawmakers used to proudly say they were deficit hawks, fiscal discipline has generally fallen out of favor in Washington. But anxious signals from the bond market could change that.” HPS ANALYSIS: We apologize for this long article and for harping on this subject, but it is essential that specialty bicycle retailers understand that they have to be much more careful about agreeing to pre-season terms and taking on debt before they assess the availability and cost of credit to their business, and their ability to turn the inventory they are committing to. In other words, to sell the inventory they are committing to and make a net pre-tax profit on it. 

08 20 26: “Walmart slides most since 2022 on slowing U.S. sales growth.” Bloomberg: “Walmart Inc.’s quarterly sales fell short of expectations, a rare miss that’s likely to stoke concern about the leading big-box retailer decelerating alongside a slow-growing U.S. economy. Sales at U.S. stores open at least a year, excluding fuel, rose 2.6 percent in the second quarter, shy of the lowest analyst estimate compiled by Bloomberg. That rate of growth — hindered primarily by pricing pressure in its pharmacy business — is the slowest in more than six years. Walmart slides after slowest U.S. sales growth in six years: Walmart shares fell as much as 10 percent, the most intraday since 2022, in New York trading on Thursday, erasing a modest year-to-date gain through the previous day’s close. The drop was the largest among companies in the Nasdaq 100 Index. Walmart’s U.S. sales growth decelerates: Comparable sales rose 2.6 percent last quarter, the slowest in over six years. The quarterly results suggest it’s getting more challenging for the world’s largest retailer to maintain a faster growth rate as expectations from investors have risen. The earnings report also may foment anxiety about uneven economic signals and deteriorating consumer sentiment … Walmart flagged that its pharmacy business weighed on U.S. sales due to federal negotiations that have led to lower drug prices. Shoppers spent less per trip during the quarter that ended in July compared with a year ago, though the number of transactions stayed at similar levels. E-commerce sales rose. Despite difficulties in the latest period, Walmart raised its full-year guidance for sales and adjusted operating income. The company began receiving tariff refunds in the second quarter, which management will continue putting toward lowering prices … Excluding health and wellness, the company’s U.S. comparable sales rose 3.4 percent. Walmart gained market share, including in grocery, as it continued to lower prices of goods. As consumers face more pressure, Walmart has been ‘very intentional’ with where it’s investing in price, Rainey said, pointing to beef as an example. Still, the retail environment remains competitive. Walmart’s status as the country’s biggest retailer makes it an economic barometer, attracting broader scrutiny from investors looking to gauge the health of the US economy.” HPS ANALYSIS: Walmart is many things to different people. Right now, Walmart is the canary in the coal mine. It is an economic barometer telling the rest of the retailers, large and small, what the mood and willingness of the American consumer is to spend hard-earned money on the necessities – and the extras. How Walmart goes, so goes the rest of retail, and the U.S. economy.

08 22 26: “Canada says it will match U.S. tariffs 'dollar for dollar' as trade talks break down.” British Broadcasting Corporation bbc: “A fresh wave of U.S. tariffs on a wide array of Canadian goods came into effect on Saturday after a last-minute breakdown in trade talks. Announcing the suspension of negotiations shortly before the Friday night deadline, Canadian Prime Minister Mark Carney said he would impose reciprocal tariffs on U.S. goods ‘dollar for dollar.’ Carney said, ‘last-minute changes in the U.S. proposed terms were unfair, uneconomic, and called into question the reliability of any deal.’ Trade negotiators had been engaged in intense talks since July, after President Donald Trump threatened to impose a 50 percent levy on nearly $20bn (C$28bn; £14bn) of Canadian imports by 19 August. Trump had temporarily paused those tariffs earlier in the week, saying the two sides were close to signing a trade deal that was ‘very good’ for both countries. But minutes before the deadline for a deal, Carney said that while ‘important progress’ had been made in the talks, it was ‘not enough to meet our objectives for Canadians.’ ‘As a result, this evening I have decided to suspend trade negotiations with the U.S. and have directed negotiators to return to Ottawa,’ he said. ‘Last-minute changes in the U.S. proposed terms were unfair, uneconomic, and called into question the reliability of any deal.’ After Carney's announcement, U.S. trade representative Jamieson Greer said in a statement: ‘Tonight, Canada declined to finalise the trade deal under the terms agreed earlier this week.’ The breakdown of the talks puts the U.S.-Canada relationship in uncharted territory, and will be a major test for Carney's premiership. The two countries have developed one of the world's most deeply economically integrated trading relationships, and Canada sends approximately 70 percent of its exports south.” HPS ANALYSIS: First – the American bicycle business isn’t directly involved, but we are in the blast radius, and will be caught up in the collateral damage, along with the rest of the economy. It is still a bit too early to tell exactly how bad this trade war will be, or if, in fact, there will be an actual trade war by the time we go into the last quarter of this year. Two events to watch: (1) how well the current Canadian negotiations to attract investment and venture capital are finalized, and (2) how well the visit and meetings with the President of China go at the end of September, and what the read-out from those meetings says about the total U.S. tariffs on imports from China.

08 27 26: “OneUp launches used component marketplace.” Bicycle Retailer and Industry News: “OneUp Components is launching an online marketplace for selling certified pre-owned OneUp products. ‘Buyers and sellers benefit from a protected buying and payment experience: get the item that was promised in the condition it was promised in, or receive a full refund,’ the company said of its program, called ReRide. Unlike the used-gear programs run by some apparel brands, or some used-bike programs like Trek's, OneUp will not be buying or examining the used components, but it will promote the program on its website, process payments, and manage a refund policy. Sellers provide a short description of the item along with a few photos and receive a pre-paid shipping label when the item is sold. OneUp processes the payment, and sellers can opt to receive 80 percent of the sale price in cash or 100 percent in OneUp store credit. Buyers have 72 hours after delivery to inspect the item and file a claim if it is not in the condition described by the seller. The funds are released to the seller after the 72-hour period.” HPS ANALYSIS: This initially came as a surprise that evolved to an “a-ha” moment when I listened to the September 10 “Using Data” NBDA Webinar, where insights from the NBDA Market Intelligence Program were presented by TrackFly’s Scott Papich. The TrackFly data analyst pointed out that the used gear category had emerged from the data as a viable merchandising growth category, and pointed out that used gear was already an established growth category in other outdoor segments. This served to put the OneUp used component marketplace into perspective and reminded me that we are facing a totally new marketplace, with new demographics, and a new set of logics.

08 27 26: “Rad Life Mobility begins regulation crowdfunding campaign.” Bicycle Retailer and Industry News: “Rad Life Mobility has started a regulation crowdfunding campaign to support its three e-bike brands. The campaign is through Highlander Crowdfunding, giving customers, vendors, and partners of Rad Power Bikes, Serial 1, and QuietKat a ‘direct way to participate in the next chapter of a new, integrated electric mobility platform,’ according to Rad Life Mobility. A regulation crowdfund is a Securities and Exchange Commission (SEC) rule that allows private companies to raise funds from the general public, bridging the gap between traditional private placements and a full initial public offering. It allows investment by non-accredited and accredited investors. In its announcement, Rad Life said it generated more than $7 million in revenue and more than $3 million in gross profit on an audited basis for the period of Feb. 19 through June 30. During the initial operating period, the company said it invested in brand development, marketing, infrastructure, and other initiatives that resulted in a net loss of about $2 million. Rad Life Mobility, a subsidiary of Life Electric Vehicle Holdings, was formed after the acquisition of Rad Power Bikes' assets in March. QuietKat was purchased in June, and in May, Life Electric Vehicles purchased a 100,000-square-foot facility in Tennessee to serve as an assembly, distribution, and eventually a manufacturing center for Rad Power.” HPS ANALYSIS: This was also surprising, and it was also not a new concept for raising venture capital, although I haven’t seen it in the mainstream since before the pandemic. I was surprised for a number of reasons, including using a crowdfunding vehicle in this economy to raise funding for an assembly and warehousing facility and three product brands. It will certainly be most interesting to watch this financial methodology going forward.

08 28 26: “8 deaths from battery fires show hidden danger of UK's e-bike boom.” British Broadcasting Corporation bbc: “Eighteen people have died, and nearly 700 have been injured in fires caused by e-bikes and e-scooters, new data shows. Fatalities recorded by fire and rescue services across the UK from these fires include cases where people became trapped inside burning homes, died while trying to escape from a fire out of a high window, or from inhaling toxic smoke. More than 2,000 fires were started by e-bikes, e-scooters or their batteries between 2019 and 2025, Freedom of Information requests made by the BBC show. The number of incidents has risen year-on-year, and nearly half the fires started in homes or garages, the data shows. London Fire Brigade Assistant Commissioner Pam Oparaocha told BBC Verify the service is ‘increasingly concerned by the significant fire risk’ some of these vehicles can pose, especially when modified or bought second-hand. ‘From our investigations, we know many of the fires we've attended have involved second-hand vehicles or the bike has been modified using parts bought online. We urge people to be extremely careful about where they buy their e-bike or e-scooter from,’ she added. Footage of fires caused by e-bikes and e-scooters shows how quickly the vehicles can start smoking and then apparently explode, causing blazes that spread within minutes. An average of 153,000 new e-bikes have been added to the UK's roads each year since 2020, according to the cycling industry trade body, the Bicycle Association. The cost of a new e-bike ranges from around £400 to £4,000 in high street retailers such as Halfords or Decathlon, while second-hand vehicles and unregulated e-bike conversion kits can be found on online marketplaces for as little as £150. Any lithium-ion battery sold in the UK for these vehicles must meet safety requirements set out by the government that ensure the batteries can be charged safely, do not overheat, and are protected from damage. The government's "Buy Safe, Be Safe" campaign states that while millions of people use these vehicles safely every day, the risk of fire can increase if they don't meet safety rules, are damaged, modified, or used with an incompatible charger. It also says people should look for UKCA or CE product safety marks when buying an e-bike or e-scooter. The number of fires caused by e-bike and e-scooter batteries has increased dramatically from 32 in 2019 to 605 in 2025, according to the data gathered by BBC Verify.” HPS ANALYSIS: Mike Fritz and I have talked about this at some length, and this story underscores the scope of the lithium-ion battery safety issue and the absolute necessity of standards, testing, and certification. For the U.S., HPS will be recommending that the current legislative and regulatory initiatives be organized to include: (1) updating the mandatory CPSC 16 CFR 1512 standards as soon as possible and including mandatory compliance with UL 2849 and (2) testing by a Nationally Recognized Testing Laboratory (NRTL), and (3) certification, with a specified and required labeling on all bicycles and e-bikes as defined, confirming such testing and certification to retailers and the consuming public. 

08 28 26: “Businesses are getting tariff refunds. Why aren't consumers getting their cut?” National Public Radio npr: “Although the government is refunding many tariffs, most of the money is going to businesses and importers — not consumers. Last year, Sandra Alonso needed a new powered wheelchair to get around her city of Tampa, Fla., after wearing out her old one. So she ordered the same model because she knew she could easily fold it and lift it without anyone's help. ‘It's just the perfect chair for me,’ she said. Unfortunately for Alonso, the chair is made in China, and when she bought it last year, tariffs on Chinese goods were a sky-high 145 percent. She paid an extra $3,500. ‘There's no reason I had to pay double for this chair,’ Alonso said. ‘The federal government should give me my money back.’ Alonso thought she should get the refund after the Supreme Court in February ruled that many of President Trump's tariffs were illegal, leading to the federal government having to refund more than $160 billion that it had collected. The thing, however, is that the federal government can't give her that money back. That's because it is instead returning the cash to the importers that directly paid those tariff fees, typically American businesses. Those companies passed on some of the extra cost to customers, usually in the form of higher prices. But few are stepping up to share the refunds. ‘It's all just a giant transfer from consumers to corporations,’ said Michael Ettlinger, a senior fellow at the Institute on Taxation and Economic Policy. ‘You can't really design a worse tax than that.’ Shipping companies' refunds are the exception. Alonso is actually lucky. She imported her chair through UPS, which told her in an email that her refund is in the works. The company said it can take up to 90 days to get the cash to customers after the company receives it from U.S. Customs and Border Protection. In fact, UPS, FedEx and DHL have all pledged to pass along refunds they get from the government to customers. Part of the reason for that is shippers explicitly charged customers tariff fees. If the federal government charged FedEx $100 to import your package, FedEx then billed you $100. ‘Now that FedEx and UPS have received a refund of that $100 from the federal government, they are absolutely obligated to return it to the person they collected it from,’ said Terence Lau, dean of Syracuse University's college of law. ‘Otherwise it would be a pretty open-and-shut lawsuit against them for unjust enrichment.’ Retailers are another thing altogether, though: But do not expect the same from retailers. Many of them did not spell out how much customers were paying for tariffs and instead baked that cost directly into higher prices. It's hard, maybe even impossible, for the companies to know how much extra each shopper paid because of tariffs. These import taxes were rarely tracked with individual products sold and were often spread out across the supply chain, making it difficult to know how much of the tariff was directly passed on to the customer. Retailers say they'll use the tariff to cover gas bills and lower prices: Michael Ettlinger with the Institute on Taxation and Economic Policy said he's not impressed with promises to cut prices and said companies could do more. But he also said those businesses were put in a tough position by the Trump Administration, and it would be an enormous cost to figure out how to get back the money to all a company's customers. ‘It's important to keep an eye on what the real sin here is, which is that the government imposed illegal tariffs,’" Ettlinger said. HPS ANALYSIS: We harped and pounded on this subject earlier, and HPS wants to make it abundantly clear that the vast majority of consumers and specialty bicycle retailers are most definitely getting the short, dirty end of the stick when it comes to tariff refunds. This article explains why the consumers and specialty bicycle retailers that received import shipments from UPS, FedEx, and DHL will receive tariff refunds, along with Importers of Record. Everyone else, including the vast majority of consumers, will not. HPS refers to this as an unexpected consequence of the whole tariff process, but this article is correct: the real sin here is that the government imposed illegal tariffs. And, in HPS’s opinion, the government is going to continue to impose illegal tariffs and perpetuate this mess.

09 02 26: "‘We need to be fast’" investor takes minority stake in Campagnolo.” Bike Europe: “We were drawn to this investment by the quality of the underlying business and the clarity of the transformation plan the Campagnolo family and management have put in place,’ says investment company SPAC. Campagnolo can enter the next phase of reorganisation after receiving a minority stake from the Swiss investment company SPAC SA. The Campagnolo family will retain control and majority ownership. This follows the execution of an investment agreement with Campagnolo's existing quotaholders. A drastic reorganisation in the current market was unavoidable for Campagnolo, as was reported earlier this year. Soon followed news that the company had appointed an industry heavyweight as the first-ever non-family member to its Board. The next step in this process is the entry of a new investor. ‘SPAC will support our next phase of development, accelerate innovation, and strengthen its position in premium cycling,’ reported the company this morning to Bike Europe. They will also join the Board. Transformation plan: ‘We were drawn to this investment by the quality of the underlying business and the clarity of the transformation plan the Campagnolo family and management have put in place. We are pleased to support them as a minority partner, and confident this is the beginning of a strong next chapter for the brand,’ writes SPAC in a statement. Zurich, Switzerland-based SPAC SA is a well-known name in the bicycle industry as owner of Pinarello, Technogym and Q36.5. Campagnolo will continue to operate entirely independently from SPAC’s other investments in the cycling industry. ‘The cycling industry is undergoing a profound transformation, writes Campagnolo in a statement. Technology, electronics and connectivity are playing an increasingly important role in product performance, while the expectations of riders, bicycle manufacturers and commercial partners continue to evolve. In response, Campagnolo launched the wireless Super Record 12V in 2023, which was followed by a complete redesign of the company’s groupset architecture, with Super Record 13V in 2025 and the new Record in 2026. ‘The undisclosed investment represents an important step in our development and will bring additional resources and strategic expertise to accelerate the company’s transformation and further strengthen its position for the future,’ confirmed Campagnolo’s head of marketing Davide Belfiore to Bike Europe. ‘In the past year we have launched two groupsets and two wheelsets. The current market needs us to be fast, and with the support from SPAC we can act accordingly.’ Focus on OEM relationships: ‘We need to deepen relationships with the world’s leading bicycle manufacturers and commercial partners, continue to modernise our operations, and invest in the development of our brands,” says Davide Belfiore. “We have made a modest start with Orbea and Factor, but we have to strengthen our partnerships with the top 10 OEMs. At the same time, we intend to strengthen our connection with elite cycling and professional racing, which have always been central to the brand’s identity, innovation and credibility.’” HPS ANALYSIS: I mentioned last month that I knew Tulio Campagnolo and had done business with Campagnolo for several years while working for the Schwinn Bicycle Company. So, it is welcome news that this storied European brand has found and signed a minority investor that is very familiar with the upper end of the bicycle business. As that investor says, “we need to be fast,” and they and Campagnolo are going to have to adapt and do so quickly. Peter Drucker warned, “The greatest danger in times of turbulence is not the turbulence. It is to act with yesterday’s logic.”  

09 03 26: “Sinyard resumes CEO position at Specialized as Landgraf steps down.” Bicycle Retailer and Industry News: “Specialized founder Mike Sinyard will resume his position as chief executive officer on Nov. 1 as Armin Landgraf steps down after two years as CEO and four years at the company. Following 48 years holding the CEO title, Sinyard first stepped down as CEO in 2022, as former Dyson executive Scott Maguire took the role. Sinyard's new position was founder, chairman, and chief rider advocate. Landgraf, a former executive at Pon.bike and Canyon who had joined Specialized as chief of worldwide markets in 2022, was named CEO in 2024. Following that transition, Maguire moved over to lead Specialized's innovation and technology division for a time before leaving last year to join ON Holding, a Swiss running shoe company. Landgraf said, ‘Leading Specialized has been a tremendous privilege. I am proud of what we have accomplished together and grateful to our teammates, riders, and partners around the world. Specialized is in a strong position, with a clear strategy and an exceptional team.’ Sinyard, 76, said, ‘As I step back into the CEO role, I’m driven by the same passion for supporting riders and retailers. I believe Specialized has always been a big bike shop at heart, and I still show up every day committed to making it the best one it can be.’” HPS ANALYSIS: Speaking of adapting quickly! I admit I have not been following Specialized as closely as I should, and this turn of events took me by surprise. I didn’t meet Mike Sinyard when I worked for Schwinn, but I worked with people who did know Mike, like Dave Staub and Sig Mork, and told stories about the repack and riding downhill on Mount Tam when Mike was getting his company off the ground. Mike Sinyard has always been the American success story to me. Being 83 years old myself, I wish him well in taking back the CEO role in what are interesting times.

09 08 26: “Shimano's latest price increase sees the industry scramble for options.” Bike Europe: “In response to rising raw material, energy, and logistics costs, the industry's largest component supplier, Shimano, announced a temporary three percent surcharge on all orders with a delivery date between 1 August and 30 November 2026. How does the industry absorb these costs while consumer prices are already under pressure? Are there still enough options for alternative sourcing, component specifications, and efficiency improvements, or will it just kill margins, as Giant Bicycles announced in their half-year results? An industry scan quickly revealed that the announced temporary surcharge required action from all leading industry players, depending on their reliance on Shimano … Baltik Vairas CEO Gužauskas also points out that if higher component prices remain in place, they will inevitably affect bicycle prices in the market going forward. ‘Shimano components are strongly preferred and, in many cases, specifically requested by bicycle brands and end customers. Therefore, replacing these with alternative suppliers is not always straightforward or commercially viable. For this reason, we do not expect a major shift in our purchasing strategy away from Shimano.’ Looking ahead to 2027. Belgian Cycling Factory CEO Aerts still expects that the market will be difficult in Europe. In the longer term, he expects major shifts with new suppliers entering the market. ‘As a European industry, we will have to reinvent ourselves to compete against Chinese suppliers.’” HPS ANALYSIS: I don’t think I have ever seen this before, although the original, and only real “bike boom” of 1971-1974 may have had something similar. In my experience, there is no such thing as a “temporary price increase.” You either increase the selling price, or you don’t.  The interesting thing to me is there seemingly being any doubt that Shimano is clearly preferred by some in the bicycle business, and will continue to be. Perhaps the real distinction is the difference between privately held companies and public companies, like Shimano.

09 11 26: “Mixed August reports from Taiwan’s manufacturers.” Bicycle Retailer and Industry News: “Taiwan’s three publicly traded bike manufacturers had wildly varying August results, according to Operating Revenue Reports filed with the Taipei stock exchange on Thursday. Giant Group’s operating revenue was up 3.2 percent in August, to NT$5.2 billion ($165 million), its fourth consecutive month of growth. However, dismal first-quarter results mean that year-to-date the company is down 6.1 percent in operating revenue. Merida Industry’s revenues in August were NT$1.9 billion, down 20.7 percent from the same month last year. Year-to-date through August, Merida’s revenues are down 14.2 percent. Ideal Bike’s August sales were up 90.6 percent over the same month last year, to NT$145 million. Year-to-date, Ideal is nearly flat, down 0.76 percent. Component maker Sun Race-Sturmey Archer had sales of NT$42 million in August, down 29.4 percent from last August. Year-to-date, the company is down 19.9 percent.” HPS ANALYSIS: This BRAIN article is short, and I have highlighted the important pieces to make it even shorter. Year to date, Giant Group is down, Merida is down, Ideal is down, and Sun Race-Sturmey Archer is down. We have already seen what has happened to Accel Group and other brands and lesser-known suppliers in the industry. As I said, we are now living in interesting times and we would be wise to heed Peter Drucker’s warning. Yesterday’s logic is no longer applicable, and we need to sort through and analyze all the reliable data we can, realizing that the turbulence is ongoing and may get worse. So as my friend Jim Kersten has also warned for over a year now, the cavalry isn’t coming. It is up to us.

09 18 26: “By retailer demand, X-Lab is making framesets available.” Bicycle Retailer and Industry News: “X-Lab framesets will be available for the first time by the end of the month to its 300-plus U.S. retailers after many have been asking the upstart Chinese brand for that option. The RT9 (retail: $3,499), AD9 ($2,999), and GT8 ($1,999) framesets in all sizes are scheduled to arrive at the Port of Long Beach later this month, with retailers receiving them in September, said Global Marketing Head Patrick Pan on Tuesday. He added that retailers have said they would generate ‘great’ revenue opportunities by building complete bikes with them. Pan said retailers will not be held to any minimum orders, and the margins would be at least industry average if not better. ‘Certainly, there are two ways to size that equation,’ Pan said. ‘You can get really, really incredible margins, or you can just make sure they keep selling bikes. So we're focusing a little bit more on the latter.’ While primarily focused on retailer sales, X-Lab framesets will be available eventually directly to consumers after retailer orders are placed, likely by the fall, Pan said. XDS factory is X-Lab's parent company and is a large OEM manufacturer, making about eight million bikes a year.” HPS ANALYSIS: This may be the most interesting of all the articles in this September 2026 HPS Bicycle Business Reporter. X-Lab – is a Chinese-owned company that might just be the cutting edge of the next wave of brands and suppliers to the U.S. Please indulge me while I tell you a true story. In 1983 I visited China as part of a U.S. ANSI delegation to a meeting of ISO TC149, the technical committee that was writing what is now ISO 4210. In 1983 China was just opening to the West, Chairman Mao had passed in 1978, and Deng Xiaoping had risen to power. The meeting was in Shanghai and a tour of Phoenix, one of two state owned bicycle manufacturers, was on the agenda. I had never seen anything like Phoenix. It was a walled manufacturing complex a U.S. mile square, that is a mile on each side, inside of which everything, including tires and tubes were produced for Phoenix bicycles. In 1983 they were black, 28-inch wheel, rod-brake roadsters, copies of 1938 Raleighs. I know, because there was a long-time Raleigh engineer on the UK delegation who told us. From what our research is indicating, X-Lab is Phoenix, and may very well represent, at least, the near-term future that will shake out and become a little clearer by the end of this year.

Contact Jay Townley, jay@humanpoweredsolutions.com