With the cycling industry gripped by yet another period of uncertainty, this week’s episode of the road.cc Podcast focuses on the story that’s dominated the front pages all month – Donald Trump’s chaos-creating global tariffs.
And why, at least according to one industry insider, they aren’t going to, as feared by many, “sink the ship”, and could even present an opportunity for bike brands in the UK to capitalise on a re-ordered global market.
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Unveiled at the start of April, the Trump administration’s controversial so-called ‘reciprocal’ tariffs aimed to revitalise American manufacturing and counter what the US president views as unfair trade practices inflicted on the United States – by imposing additional taxes on imports from the vast majority of other countries.
And when it came to Asia, the cycling industry’s key manufacturing hub, these tariffs were especially eye-wateringly hefty.
China – which produces almost 50 million bikes a year and accounts for 86 per cent of all bike imports to the US – saw its tariffs shoot up at the start of April to over 90 per cent thanks to a new 34 per cent rate, while Taiwan was hit with an additional 32 per cent targeted tariff, Vietnam 46 per cent, Japan 24 per cent, Thailand 36 per cent, Cambodia 46 per cent, and Indonesia 32 per cent.
Of course, after some very predictable market turmoil, Trump pressed pause on these new higher rates for 90 days, with the exception of China, which now faces tariffs of up to 145 per cent on goods entering the US.
With every other country facing a blanket 10 per cent tariff until July, it’s fair to say that the cycling industry – after years of post-Covid turmoil – is currently facing yet another period of economic uncertainty.
Over the past few weeks we’ve seen Trek, Giant, Specialized, and Brompton all announce that the prices of their bikes are likely to rise – or have already risen – for customers in the US, while American trade organisations have described the tariffs as a “potentially existential threat” to the cycling industry, and one that could potentially lead to the ruin of many brands.
And today we reported that Silca blamed the “global tariff issues” for their new electric mini pumps “not being currently economically viable” in the US, meaning just 100 were made available to the American market – selling out almost instantly, perhaps unsurprisingly.
However, speaking to the road.cc Podcast this week, Dominic Loh, the director of business at Jet Rider, the parent company that runs mountain bike brands Funn and Granite Design, offered a rather more optimistic take on the cycling industry’s ability to cope with the potential of a Trump-led global trade war.
Fresh from the Sea Otter Classic, where The Donald’s tariffs were the talk of the town, Loh has over a decade’s worth of experience in the industry, providing the link between brands and the factories that produce their bikes and components, first working with Scottish company Pipedream Cycles, where he was co-owner, while also being a member of the Singapore Cycling Federation’s board.
And while he admits that the tariffs have caused some stress within the industry, especially among already struggling brands, he’s positive that they “won’t sink the ship”.
Reflecting on the uncertainty currently hovering over bike brands across the world, and describing the last few years as a “boxing match” for the cycling industry, featuring overstock blow after inflationary blow, Loh told the road.cc Podcast: “I think the industry has been pretty resilient – but we’re not out of the woods yet. For some companies, it’s been a rollercoaster ride, but for others, they’ve seen opportunities since Covid.
“Since the tariffs were announced, nobody knows what’s next. I got a few phone calls from people in the industry who were saying things like, ‘maybe it’s time for to wrap up the business, because there’s already not much margin, maybe it’s time to move on to the next industry’.
“But the bike industry is just one component of this tariffs exercise. For instance, the outdoor industry is going to face a much bigger impact than cycling, because the volumes are much bigger.”
> Trek increases prices of “most” bike models for US customers in response to Trump tariffs
He continued: “At Sea Otter, especially after the 90-day pause was introduced, everyone was generally positive. But for some of the Asian brands, there’s a lot of uncertainty, because there’s a reliance on the American market.
“I don’t think the doom and gloom will stay – we’re in a period of adjustment, in which industry figures and governments are going to have to come together to work out how to weather this situation.”
Asked about Trek, Specialized, and Giant already bumping up their prices for customers at their local bike shop, in anticipation of the return of higher tariffs following the 90-day pause, Loh admits there is an element of PR in those companies’ recent public pronouncements.
However, he also noted: “I also think they’re trying to pre-emptively warn consumers that there will potentially be a price increase. You do not want your consumers crying foul when prices increase – so it’s pre-emptive PR. Whether or not prices do increase, that’s secondary.
“The 90-day pause is giving the industry a bit of breathing space. It’s early days to figure out what’s going to happen, but everyone should now be working at how best to move forward, and industry figures should be letting the governments know about their concerns.”
So, what do the tariffs mean for the future of a cycling industry still limping towards some form of post-Covid recovery?
“It’s early days,” Loh says, emphasising the need for brands to stay “nimble” and avoid putting all their eggs in one basket.
“The bike industry is way more resilient than we all think it is. We have survived so many good years and bad years. And I don’t think the tariffs are going to sink the ship.
“But if you’re not careful with how you manage your margins, you might hit the wall. The cost of living has changed things, and inflationary measures have made brands review their pricing structures, tariff or no tariff.
“Some people will say that it’s going to get worse before it gets better, but I think the tariffs will actually cause brands to start relooking at where the major market is.
“The world is not just North America, right. We have the Oceania market, we have the European market, and we have a UK market carved out from the post-Brexit situation.
“There might be even a good opportunity for the UK market to basically step up. The tariffs that the UK have are not as big as their European partners. The UK got quite a favourable tariff rate, so maybe it’s time for the UK to relook at their market, as there’s definitely a vibrant industry there.
“The world is big enough for any brands to be nimble and to move their business around. Today you might be focusing on the North American market or the US market, but the risk can be diversified to other areas.
“They say you shouldn’t put all your eggs in one basket. That’s basically key right now. It’s important for all brands to sit down and reevaluate. How do you move from here? If you move from a single or dual market reliance to a global market, you might be able to see the silver lining.
“There are always opportunities. The North American market is huge, and everyone thinks it’s the single most important market. But the world is big enough to cushion this tariff.”
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