Tariffs have been discussed a lot in the larger macroeconomic ecosystem, but how will they affect the business of cycling and the bike industry at large? In this article, Radavist contributor Kyle Klain dives into the ins and outs of the proposed tariffs and how we can expect them to impact cycling…
Rolling Resistance
In the world of cycling, everything is connected – just like the parts of a bike itself. Every chainring, spoke, and frame has an origin story, and often, that story is international. Taiwan, China, and Japan are some of the most important players in the global cycling industry, producing the bicycles and components that fuel our adventures on two wheels. But what happens when the flow of these components is disrupted by import tariffs as proposed by the President-elect? Just as a misaligned derailleur can derail a ride, tariffs can throw a wrench into the fine-tuned machine that is the bicycle supply chain.
Let’s explore the ripple effects of import tariffs on bikes and components from the three major Asian manufacturing centers: Taiwan, China, and Japan. From local bike shop shelves to international trade dynamics, these policies have far-reaching implications for riders, brands, and the culture of cycling itself.
The Importance of East Asia in Cycling
Before diving into tariffs, it’s worth understanding the roles that Taiwan, China, and Japan play in the cycling world:
Taiwan is the heavyweight champion of high-end bikes and components. Think giants like Giant (pun intended), Merida, Maxway, and boutique brands producing carbon frames that are lighter than your riding gloves.
China, on the other hand, is a powerhouse for mass-market bikes and budget-friendly components, producing up to 60% of the world’s bicycle production (and more statistics here), which helps get more people on two wheels worldwide.
Japan, with its storied brands like Shimano and Nitto, has a reputation for precision and craftsmanship, particularly in component groupsets, tires, seatposts, handlebars, racks, fenders, and hubs.
The connection between these countries and the global cycling scene is inseparable. They don’t just produce products; they shape the way we ride. When import tariffs are imposed on goods from these regions, it’s not just an economic policy – it’s a direct hit to the cycling ecosystem.
From 藝術 (Art), 手工藝 (Craftsmanship), 製造 (Manufacture): Taichung Taiwan is a Bicycling Manufacturing Mecca
What Are Import Tariffs, Anyway?
Let’s break this down. An import tariff is essentially a tax that a government places on goods coming into a country. The goal is to make imported products more expensive compared to domestic ones, encouraging consumers and businesses to buy locally made items. Sounds straightforward, right? But in practice, tariffs often have unintended consequences.
For bicycles and components, tariffs can raise the prices of imported products, making them less competitive. For countries like the United States, which imports the majority of its bikes and components from Taiwan, China, and Japan, this can mean higher costs for brands and, ultimately, for riders. And here’s the kicker: the U.S. doesn’t have the manufacturing capacity to replace these imports with domestic production at scale. This creates a tricky situation where riders end up paying more for the same gear.
From 藝術 (Art), 手工藝 (Craftsmanship), 製造 (Manufacture): Taichung Taiwan is a Bicycling Manufacturing Mecca
Taiwan: The High-End Dilemma
Let’s start with Taiwan, widely recognized as the manufacturing hub for cycling. This is where you’ll find some of the most advanced manufacturing facilities in the world, churning out carbon fiber frames, precision-machined components, aluminum frames and everything in between. When tariffs are imposed on Taiwanese goods, it’s not just about raising prices – it’s about hitting the heart of all of cycling.
For riders who prefer top-tier bikes, tariffs mean steeper prices at checkout. A carbon road frame that once felt like an investment now feels like a luxury (granted, for many of us it has always felt that way, but that’s neither here nor there). Smaller brands that rely on Taiwanese manufacturers – see just a few in our Taiwanese manufacturing Shop Visit from last year – face an uphill battle, too. They may not have the margins to absorb the extra costs, forcing them to either pass those costs on to consumers or look for cheaper manufacturing options, often at the expense of quality.
The picture isn’t rosy for Taiwan’s manufacturers either. While they’re global leaders in mass quality, they face increasing competition from other countries. Tariffs can make their products less attractive to importers, potentially driving business to countries with lower taxes or less stringent trade policies. Will this force component manufacturing to relocate to the United States? Possibly, but many American firms have spent decades working with their Taiwanese partners on building facilities and perfecting the craft. Onshoring doesn’t happen overnight.
Neuhaus Metalworks has its 3D sintered components made in Shanghai, China
China: The Mass-Market Squeeze
China’s role in the cycling world is different but equally significant, delivering 60% of the world’s bicycle production for a total of $13 billion in bicycle-related sales. It’s the go-to source for budget bikes, entry-level components, and the nuts and bolts (literally) that keep the industry spinning. Tariffs on Chinese goods can make cycling less accessible to new riders, who often start with affordable bikes before upgrading to higher-end models.
Consider this: A $400 commuter bike from a Chinese factory suddenly costs $500 after tariffs are applied. For someone on the fence about biking to work, that price hike might be enough to stick with their car or public transit. This isn’t just bad for bike sales – it’s bad for cycling culture. The fewer new riders we bring into the fold, the harder it is to grow the community.
For brands that rely on Chinese manufacturing, tariffs force tough decisions. Some might try to relocate production to other countries like Vietnam or Cambodia, which can be a logistical nightmare. Others might compromise on quality or design to keep costs down, which is a lose-lose for everyone involved.
Mehdi Farsi from State Bicycle Co. offered this perspective:
“Ultimately, I feel like the net-effect of tariffs undermines its stated purpose – to bring jobs to the USA. In reality, many jobs will be lost or in jeopardy. Despite manufacturing our products overseas, State Bicycle Co. currently employs 10 people here full-time to market, design, service, ship, and build bikes. On top of that we employ freelance designers, videographers, and various agencies in marketing. If our costs rise, we have to scale back on all of these fronts. That means raises are less frequent, projects get scaled back or eliminated, marketing budgets dry up. These are the downstream consequences of imposing extra costs on small businesses. Some people imagine that when goods are produced off-shore, all of the funds/ jobs are leaving the country. This couldn’t be further from the truth. Our small business alone has contributed millions of dollars annually to the US economy through wages and taxes.
For consumers, of course, this means higher costs. But also, re-engineering a stable supply chain also brings some unforeseen / unintended consequences. For example, what happens when companies make the tough decision to leave a long-standing partnership with an existing supplier to move to a new country of production? There is a learning curve in terms of company standards, testing, quality etc. I am afraid companies will scramble to move things (if 60% tariffs come to fruition), and that could lead to poorer quality and less safe products out on the market. We could also see shortages as companies shut down long standing relationships in order to survive. Expecting small businesses to completely on-shore bicycle production (especially in our price point) is a pipe dream. Most small businesses are fighting tooth & nail to survive and lack the huge capital stockpile needed to open a manufacturing facility domestically. Even then, many parts and components would still need to be brought in from other parts of the world.
Lastly, limiting options for production partners stifles entrepreneurship and economic growth. In 2009, when I was 25 years old, my brother Reza and I started State Bicycle Co. with very little-to-no savings. We had to be scrappy, resourceful, and savvy to get the business off the ground and sustain it through the ups and downs of the last 15 years. Without flexibility in choosing production partners, our ability to keep costs manageable and take calculated risks might have been severely hampered. Had there been more hurdles at the time, who knows – State Bicycle Co. might never have gotten off the ground. For every small business that doesn’t get the chance to launch because of these barriers, there are countless potential jobs that are lost before they’re even created. Startups like ours don’t just grow by selling products; they create ecosystems of employment—from full-time staff to freelancers, agencies, and supply chain partners. The ripple effect of these lost opportunities is immense: fewer new businesses mean fewer jobs, less innovation, and a less vibrant economy. The number of potential good ideas that will never get off the ground due to tariffs is immeasurable – yet another unintended consequence of these policies. For the economy to thrive, we need to empower entrepreneurs, not restrict them.”
State Bicycle Co’s production is 80% in China.
Nitto factory visit by our friends at Sim Works
Japan: Precision Under Pressure
When it comes to Japan, the focus shifts to high-precision components. Shimano is the name that comes to mind – a brand so synonymous with cycling that it’s hard to imagine a bike without its parts. Tariffs on Japanese goods don’t just affect the price of a derailleur or a cassette; they influence the availability of these components across the board.
Shimano operates on a global scale, but its heart remains in Japan. Higher import costs mean that brands might start looking for alternative suppliers, which can lead to a fractured market. And while there are other players in the game (hello, SRAM and Campagnolo), Shimano’s dominance means that tariffs can cause significant disruptions in the supply chain.
For riders, the impact is both tangible and emotional. Yes, your Ultegra groupset might cost more, but there’s also the question of legacy. Japanese components are revered for their quality and longevity. Tariffs that disrupt this legacy feel like a loss for the entire cycling community.
The Bigger Tariffs Picture: Riders, Retailers, and Culture
At the end of the day, tariffs don’t exist in a vacuum. They affect everyone, from the casual commuter to the hardcore gravel grinder. Higher prices mean fewer people buying bikes, which trickles down to local bike shops, community cycling events, and even advocacy efforts. When the cost of entry to cycling rises, the culture around it suffers.
For bike shops, tariffs can be a double whammy. Not only do they have to charge more for bikes and components, but they also face shrinking margins as consumers become more price-sensitive. Some shops might turn to alternative brands or even start sourcing from domestic manufacturers, but these options often come with their own set of challenges.
For cycling culture as a whole, tariffs can create a sense of exclusivity that runs counter to the spirit of the sport. Cycling should be for everyone, but when prices climb, it becomes harder to make that a reality.
What’s Next?
So, what’s the solution? That’s the billion-dollar question. Tariffs are often part of broader political and economic strategies, making them difficult to reverse overnight. But there are steps the cycling community can take to mitigate the impact.
For starters, brands can get creative with their supply chains, exploring new manufacturing hubs or investing in automation to reduce costs. Riders can support their local bike shops and advocacy groups, ensuring that the culture of cycling remains strong even in tough times. And policymakers need to consider the broader implications of tariffs, weighing economic goals against the cultural and environmental benefits of a thriving cycling industry. Will we see pushback from advisors and Senators with ties to larger manufacturing sectors such as aerospace or agriculture that may temper the proposed tariffs?
Is There a Silver Lining with Tariffs?
Well, yes. I’ll let Preston Martin, founder of BTI (Bicycle Technologies International) provide his thoughts:
The incoming administration has plans to make US manufacturing more competitive. This could be a win in terms of getting goods to market faster by minimizing the shipping lead time and added cost associated with importing. Most bicycle products are imported.
Another benefit is minimizing the tariff markup that consumers see on so many goods now. The tradeoffs are that many goods aren’t yet produced in the US, for instance low to mid priced bicycle pedals. Should higher tariffs go into effect, consumer prices may go up before an alternative US source opens up. If the new administration devalues the US dollar to further protect US manufacturing, this could further compound import price inflation.
The other question is where will the additional labor needed for US manufacturing expansion come from? At a 4% unemployment rate the US is statistically at full employment, meaning virtually everyone who wants a job has a job. Outside help may be necessary to increase production capacity. On top of the above factors, the new administration promises additional tax incentives for US manufacturers.
While the short term may mean higher consumer prices, the juice could be worth the squeeze later. The US bike industry is watching closely.
So there’s that perspective to consider, too.
Keep Spinning
Import tariffs might seem like a dry topic, but their impact is anything but. They touch every part of the cycling experience, from the bikes we ride to the communities we build around them. As riders, we can’t control trade policies, but we can stay informed, support each other, and keep pedaling forward – because at the end of the day, that’s what it’s all about.
We Are One’s manufacturing facilities in Kamloops, BC
Breaking News!
Recent announcements from the President-elect have now included a 25% tariff for imported goods from both Canada and Mexico. While not nearly as large of a manufacturing region as East Asia, Canada, in particular, has been increasing its domestic manufacturing in recent years, including brands such as We Are One, Blackspire, 9Point8, and portions of the Race Face catalog. We think, speculatively, that the United States makes up the majority of their export market, and this could impact their sales and profitability…
