How Tariffs and New Legislation Are Shaping the Future of Bicycle Manufacturing
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- เผยแพร่เมื่อ 18 พ.ค. 2024
- Find us at gograva.com
Hey everybody, it's Aaron from Go Grava! In today's video, we dive into the potential impacts of new tariffs and legislation on the bicycle industry. The Biden administration's proposed tariffs on Chinese goods could significantly affect e-bike batteries, potentially increasing costs from 25% to 100%. This could make e-bikes much more expensive for U.S. consumers.
We also discuss the House-approved lithium-ion battery standards bill, which aims to ensure the safety of imported batteries. This could mean higher prices but safer products.
With rising costs, some companies might shift manufacturing from China to South America, where labor costs are lower and free trade agreements can reduce import taxes. I share insights on how this shift could benefit the industry and potentially lead to more bicycles being made in countries like Peru and Colombia.
Join me as I explore the geopolitical and economic factors that might drive these changes and what it means for the future of cycling. If you’re thinking about buying a new bike, now might be the time before prices go up!
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We need to onshore more of our jobs, especially in the electric battery and motor market. If Covid taught us anything it’s that the global supply chain can be a liability during more challenging times because they viral or political.
I think we can onshore batteries. Well, Tesla onshored batteries, so it’s possible.
Good thing, cause bike were getting a little too cheap. Wasn't sure what to do with all the extra money I have.
😂
Ha ha.
When bicycles and international macroeconomics join forces: Grava.
Just sell the battery pack separately. A bike is not a car and the tariff isn’t intended to shore up the American ebike manufacturers. It’s intended to shore up American car manufacturers.
True, the original intent is to shore up the auto industry. Sometimes the government is just hammer and everything ends up being a nail.
The tariff schedule will tax these items differently. Prices will go up some, but not 100%
I love Colombia and spent extensive time down there, Ecuador and Brazil. Those Govs down in South America tend to explode every ten years so we will see. Mexico could be interesting.
Colombia is one of my favorite countries. Colombians are the nicest people I have ever met.
@@gograva I love it, worked with hundreds of biz owners down there, cant wait to go back. Need to mountain bike more there.
Are bikes made in Peru made with quality manufacturing?
Yes. They are using Reynolds 520 Chromoly and the welds are really good. Better than some of the other big factory brands. I traveled to Lima, Peru to review their factory. What I found was a small team of people working in a 3 story building doing a good job producing bike frames. The only obstacle I see with Marino, is learning how to grow as more people discover his bicycles.
I heard the Peruvians use clay for frames. Dunno. It seems to me that for $10,000 bikes we should be able to build them in the US. Are we that far gone??
It’s the components that run up the price. No matter what, carbon fiber takes 40 man hours to physically lay up any carbon bicycle. So, a lot of that is labor. Then, if they are doing high quality QA, every frame is x-rayed, then a portion are pulled off the line for full testing. It can be really expensive. But, low to mid range bicycle prices haven’t changed much in 10 to 20 years. 1999 Specialized Allez $999, today $1,200.
@@gogravaThose processes are all designed with the input costs in mind. If labor is cheap and capital equipment is expensive, you use labor rather than machines. If production of components is onshored from places with lower labor costs, they’ll be designed to use more automated processes and reduce labor. You don’t just take the engineering and production process from 1 area and copy paste it in another 1 to 1 😂
When you say import taxes on bicycles from China, do you mean bicycles from Taiwan? I only ask because there's not a consensus on if China = Taiwan.
The world treats Taiwan as a separate country when it comes to trade. Taiwan has its own president, constitution, military, currency, and trade agreements with other countries around the world. The WTO and other countries do business with Taiwan as if it is its own country. That is Taiwan's Center of Gravity (COG). China wants Taiwan back so it will disrupt the COG by making business as difficult as possible in the region to drive companies and manufacturing out of the region. That isolates Taiwan. Most of the basic goods to do manufacturing in the region come out of China even though China is importing a lot of those raw materials from the USA, Australia, and South America. It is working because Nike, Apple, and a lot of other very large companies are moving out of the region. The USA is moving chip manufacturing back to the United States because computer chips are now a commodity like Oil and food.
The argument for China = Taiwan is very murky. Basically, after WWII, NATO took away Taiwan from Japan and handed it back to China. However, during the 1951 San Fransisco accord nobody from China came to actually sign the agreement, because we didn't invite them or let them be in the treaty agreement. This was due to the PRC and the ROC involved or at the conclusion of the Chinese civil war. So, as far as business and trade goes, Taiwan is its own country, but as far as history goes, it gets very murky, very fast.
USA done many things which make many workers uncompetitive from cost and to be honest from quality points of view. In some cases more and in some less and in many they still competitive because they have work and practice when in some cases outsourcing some work are not in option. It is outsider point of view so be wise about.
In my opinion trying to catch lowest bidder without alternative variants is actually reason for all this shit which now happened in a world. If we have at least one alternative for china or russia(written intentionally) we can just ditch them out... But no... And now they use our money to kill us(in my case literally)... Is it wise? Think.
You know where else has no tariff... The United States of America.
Fact
Halarious the prices people pay for these pos bikes
I hope trump makes the tarrifs a 1000%
He might
Taiwan is part of China and is treated separately. Will the tariffs apply to Taiwan? Many bicycles are built in Taiwan. It seems perfectly OK to make more bikes in South America. Those folks gotta eat too. South American countries are mostly Democratic.
No, the Tariffs shouldn't apply to Taiwan, but you have to look at source parts and material. The problem could be that the USA puts Tariffs on the source material like Steel, Aluminum, Carbon, or fabricated parts from China. Even though bicycles are made in Taiwan, the source material (Steel, Aluminum, Carbon Fiber) for these bicycles are still made in China. Now, this could also affect LATAM but it all depends on the revisions and the future political situation in the USA. I like to use Germany as an example. Canyon bicycles sold in Germany are manufactured in Germany because of restrictive trade laws. But, Canyon bicycle sold in the USA are manufactured in Asia because it's cheaper and the trade laws are more relaxed. The same goes for CUBE bicycles in Germany. I lived 30 minutes from the Factory and it's cheaper to manufacture bicycles in Germany due to the restrictions on foreign imports. Just a few thoughts as I've investigated all the different regions around the world. LOOK bicycles is another interesting topic since they chose to manufacture in Africa.
The other thing to note is NIKE going from 11 factories in China to 3 factories now. Apple moving its factories to India. It's all to de-risk their manufacturing and supply chain and a possible USA response to the free flow of cheap goods into the US market without the "Coverage" of USA companies. The previous model of manufacturing in China has changed. Before, the product lifecycle kept a USA corporation or business in the Product sales loop. Now, you can buy directly from the factories in China and ship via Temu, AliExpress, Amazon, or TikTok shop. That leaves the consumer completely unprotected because you will never be able to litigate in another country for damages a product has caused.
Taiwan is part of China which is why they have Patriots and F-16s
Taiwan is not a part of China and never will be.
@@gograva I bought my first new bicycle when I finished college years ago. It was a Schwinn Continental built in Chicago. I fully believe quality bicycles can be made outside of China with non Chinese parts. Your other post notes the movement to India. The 1.4 billion people in India can also build bicycles for export. Or I just get a used bike.