Bike shops in the Tetons are preparing for higher sticker prices on the products they sell if a proposed 25 percent tariff on bikes, parts and accessories from China is adopted.
Ninety-seven percent of children’s and BMX bikes and 94 percent of all bicycles come from China, industry groups say, and the tariffs will lead to higher retail prices. The possibility that sales will decline worries everyone.
“Generally speaking, with 2019 bikes versus 2018 bikes, the exact same bike is going to be about $200 more,” said Kyle Wies of Fitzgerald’s Bicycles, which operates in Jackson and Victor, Idaho. “We are concerned about it, and we’re remaining flexible.”
The 25 percent levy on bicycles, parts and accessories was proposed by the U.S. Trade Representative in early August as part of a package of tariffs on Chinese imports. That was an increase from the initial 10 percent levy proposed.
The Bicycle Product Suppliers Association, the National Bicycle Dealers Association, the cycling advocacy group People for Bikes and individual bike manufacturers are fighting the tariff (see sidebar).
According People for Bikes, items subject to the levy would include complete bicycles, frames, tires, inner tubes, rims, spokes, brakes, saddles, pedals, helmets and bike racks.
E-bikes and e-bike motors imported from China are already subject to a new 25 percent tariff that took effect Aug. 23.
“We’re a demo center for Rad Power Bikes,” said Chris Knobe, owner of E Bikes of Jackson Hole. “They just upped their price by $200.”
Rad sells direct to consumers, so the higher price tag on its models doesn’t affect E Bikes of Jackson Hole, he said. But the tariff on motors will have an effect.
“Where we’ll see it is when we’re sourcing parts to do a custom build or convert a bike. ... That’s where it will be a little more expensive,” Knobe said.
The tariff was imposed at a time when interest in e-bikes is soaring.
“People try them for the first time and get really excited,” Knobe said. “A lot of traditional bicycle riders are starting to use them for transportation.”
With a broader 25 percent tariff on the horizon, shops are looking at their options.
“We’ve got a lot of new bikes and parts and gear,” said Bryce Carroll, manager of Hoff’s Bikesmith in Jackson. If the tariffs become a reality “we’re going to try not to pass those price changes on as much as we can.”
Hoff’s is focused on what it can control.
“We’ve curbed some of the purchasing for next year to see what happens,” Carroll said.
Hoff’s sells a lot of refurbished used bikes, and Carroll expects that part of the shop’s business to be strong. The shop will also continue to focus on service.
“Our mechanics have 10 to 20 years of experience,” he said. “We’d like to keep our labor prices the same even if our manufacturers raise the prices for the actual consumer.”
With Jackson’s mania for cycling and the community’s wealth, consumers here might keep buying bikes and accessories even if prices rise as a result of tariffs.
“The bubble effect we have here is going to help,” Carroll said.
Wies, who manages the Fitzgerald’s location in Victor, said that because a 25 percent tariff was still just a proposal “the situation is fluid.”
But suppliers “are telling us to be prepared for it. ... Everyone along the line is preparing for that $200 price increase,” he said.
Thanks to years of experience, Wies said, Fitzgerald’s Bicycles is well-versed in the art of stocking.
“I’m already at the point where I don’t over order,” he said. “With certain types of bikes like gravel bikes I literally have a sheet for 2019 orders.”
Careful stocking will come into play if the tariff becomes reality.
“It’s not going to really change anything,” Wies said, “except that instead of preferring 50 fat bikes for the winter, maybe I might order 20. ... We’re planning to be slower, and if we’re not we’ll order more.”
Though he doesn’t expect a big change in day-to-day business, he said that if someone really wants to buy a new bike, “I wouldn’t wait until next summer.”