President Donald Trump announced plans to introduce reciprocal tariffs that could take effect as early as April 2, 2025, potentially impacting the US bicycle industry and its largest supplier nations.
The executive memo, released on Thursday February 13, directs officials to adjust US import duties on a product-by-product basis, matching each nation’s tariffs on equivalent US products. This move could lead to significant increases in tariffs on bicycle products, as some major supplier nations impose relatively high tariffs on US bikes, e-bikes, and related products, even though these countries rarely import such goods from the United States.
Major supplier nations that may be affected
Vietnam, which has become a popular alternative manufacturing hub to China, currently imposes a 45% tariff on US bikes and a 55% tariff on US e-bikes. Should reciprocal tariffs be enforced, Vietnam-made bicycles could face US duties nearly identical to those currently levied on Chinese imports.
India, considered a growing source for the US mass-market bicycle industry, has a 20% tariff on US bicycles. Reports suggest that India recently reduced this rate to 15% ahead of Prime Minister Narendra Modi’s visit to the United States. A matching increase in tariffs on Indian bicycles would raise US rates from 11% or 5.5% to 15%, a modest adjustment.
Malaysia, where Shimano manufactures a variety of bicycle components, maintains a 5% tariff on most US parts and a 6% tariff on US bikes. Currently, the US imposes an 8% tariff on pedals and other components from Malaysia and most other countries.
EU tariffs to be evaluated
The European Union imposes a 4.7% tariff on US bike saddles, lower than the 8% that the US currently charges on EU saddles. However, the EU’s 15% tariff on American bicycles could lead the US to raise its own tariffs on European road and mountain bikes. Trump’s directive also requires officials to consider value-added taxes (VAT) imposed by EU nations when calculating reciprocal rates.
Tariff uncertainties
Questions remain regarding the implementation of these tariffs, particularly whether the US might lower some rates to match those of trading partners. It is also unclear how foreign governments might respond, with some likely adjusting their tariffs to avoid escalating trade tensions, while others may retaliate.
Another uncertainty involves the logistics of updating and managing over 17,000 US import codes to reflect the tariff structures of the 186 countries on the Most Favored Nation list. While Republicans in the US House of Representatives have introduced legislation to grant presidents the authority to impose reciprocal tariffs, that legislation has not advanced. As a result, the legal framework Trump might use to enforce these tariffs without congressional approval remains uncertain.
Industry stakeholders will be watching US trade policy closely in the coming weeks to see if negotiations can avert a trade war that could potentially reshape global supply chains and impact consumer prices.
The fourth quarter of 2024 saw continued moderate expansion in the global goods trade, according to the latest WTO Goods Trade Barometer. Prospects for trade in 2025 could, however, be affected by possible trade policy shifts.
The Goods Trade Barometer serves as a composite leading indicator for global trade, offering real-time insights into the direction of merchandise trade in relation to recent patterns. When the barometer exceeds a value of 100, it indicates trade volumes are above the expected trend, whereas values below 100 imply that goods trade has either dipped below trend or is likely to do so soon.]
Currently, the barometer index stands at 102.7 (illustrated by the blue line above), which is higher than the quarterly trade volume index (shown by the black line) and surpasses the baseline value of 100. This suggests a steady growth in trade as we approach the fourth quarter. However, the forecast is tempered by increasing economic uncertainty, including potential changes in trade policies.
Most of the barometer’s component indices are either on or above trend, with the exception of the electronic components index, which is at 95.4 and has stabilized below trend. The indices for export orders and raw materials are on trend at 100.5, while air freight (102.9), automotive products (104.0), and container shipping (105.8) are all significantly above trend.
Notably, the container shipping index has seen the most substantial improvement over the past three months, while the air freight index has lost some momentum. Export orders, typically the most reliable predictor among the barometer’s components, are hovering close to the baseline value of 100, indicating a likelihood of steady trade growth in the near future.
The WTO’s latest trade forecast, released on October 10, predicts that trade volume growth for 2024 will be approximately 2.7%, with an anticipated increase to 3.0% in 2025. This updated forecast reflects only slight adjustments at the global level compared to the April predictions, though there were significant regional revisions. Notably, Asian economies experienced a faster-than-expected rise in exports, while North American countries saw a surge in imports during the first half of 2024. In contrast, European trade flows continued to decline in both exports and imports, which has negatively impacted overall global trade growth. The next trade forecast from the WTO is scheduled for release in April 2025.
You can access the complete Goods Trade Barometer at this link.
For more information on the methodology, please refer to the technical note available here.
Comments Off on New Zealand and EU trade deal comes into force
The EU and NZ FTA (Free Trade Agreement) is expected to make trading opportunities much easier between the two regions, and is estimated to save EU companies €140 million a year in duties.
The FTA agreement is expected to increase business opportunities in the EU and New Zealand by making trading much easier and cheaper with benefits for businesses, citizens and farmers. Its core focuses are on benefiting farmers, trade in goods, and investment & services on digital trade. The FTA is also underlines sustainability commitments that comply with the Paris Climate Agreement and core working rights.
Key FTA advantages that look set to improve business relations between EU & NZ
Zero tariffs on EU exports to New Zealand.
New Zealand’s service market to widen in key sectors including financial services, telecomms, maritime transport and delivery services.
Non-discriminatory treatment of EU investors in New Zealand.
EU companies to get improved access to New Zealand government procurement contracts for goods, services, works and works concessions.
Guidelines to help small businesses’ exports.
Significantly reduced compliance requirements and procedures.
The benefits that zero tariffs & improved trading market conditions present
It has been reported that in 2022 EU businesses exported €6.258bn of goods to New Zealand, and imported €2.807bn from there. Now that the new FTA has removed tariffs, this factor alone could save EU businesses approximately €140 million in duties per year on exporting their goods to New Zealand, and it is expected to help grow overall bilateral trade by up to 30% within a decade*.
The FTA zero tariffs is exciting news for many European businesses, including those in the motor vehicles and parts industry, which previously experienced tariffs of up to 10%.
Senate legislation has been introduced in Washington to restrict non-market economies, for example China, from using the de minimis threshold to import products, including e-bikes and lithium-ion batteries, that are potentially unsafe for the US market
The Import Security and Fairness Act was submitted by reps. Earl Blumenauer (D-Ore.) and Neal Dunn (R-Fla.), and Sens. Sherrod Brown (D-Ohio) and Marco Rubio (R-Fla.), and follows the original bill passed in January 2022 that strives to keep economies from taking advantage of the $800 de minimis threshold. Already an estimated two million packages enter the US under that threshold on a daily basis, without inspection, duties, and taxes, including e-bikes and lithium-ion batteries.
Lithium-ion batteries and unregulated e-bikes regularly enter the US, through the direct-to-consumer retail stream.
Ways and Means Subcommittee on Trade member, Earl Blumenauer, commented, “The de minimis loophole is a threat to American competitiveness, consumer safety, and basic human rights,” further mentioning, “It is used by primarily Chinese companies to ship over two million packages a day into the United States. It puts American businesses at a competitive disadvantage while flooding American consumers with undoubtedly harmful products. There is virtually no way to tell whether packages that come in under the de minimis limit contain products made with forced labor, intellectual property theft, or are otherwise dangerous. It is time to close this loophole once and for all.”
Under the Import Security and Fairness Act, Customs and Border Patrol (CBP) would be required to collect more information on all de minimis shipments whilst paying close attention to those importing the products, prohibiting any that have been suspended or debarred from using the rule.
Because off-shore retailers are out of reach from the US government and the legal system, products entering under the de minimis rule can also avoid Product Safety Commission regulations. Blumenauer suggested that some importers use strategies such as “creative invoicing” in which haulers and manufacturers adjust invoice values to below $800.
Blumenauer went on to say, “Part of what’s happening with the ‘creative invoicing’ is we see an explosion — and I use that term advisedly — of e-bikes that are $799, and we’ve had a number of problems because they have defective batteries, especially in New York, but in other places.
“I think there are a series of steps that need to be taken to deal with what is a genuine threat to public safety as well as unfair competition.”
The legislation has been endorsed by a number of leading US organisations and think tanks.
Comments Off on QWIC Dealershows: preparing for a successful 2023
In the months of August, September and October, LEVA-EU member QWIC’s Annual Dealershows took place in the Netherlands, Belgium, and Germany. In total, Dealershows were held over 12 separate days at various locations spread across the 3 different countries. Almost 1,000 people visited the Dealershows.
During the QWIC Dealershows, contact with the dealer is central. This is the time to discuss the cooperation between dealers & QWIC and to hear what dealers think of current and upcoming collections. Dealers can also ask any questions they may have regarding the models and brand.
Newest QWIC model: the QWIC Mira This year, a key feature was the presentation of the latest e-bike, the Mira. QWIC received positive reactions to this new model, which fills the gap between the well-run Premium i series and the award-winning Premium Q.
Hans Terpstra, Teamlead Sales Representatives NL & BE, on the Dealer Shows: “We wanted to show our (potential) dealers why it is nice to work with QWIC, that we have made improvements and continue to improve. That there is a stable collection for 2023 and we wanted dealers to leave confident of a great partnership. I think we have all succeeded well in that.”
“At the QWIC Roadshow in Germany, the main focus is our contact with the dealers”, says Rasched Abu- Isbeih, Sales Manager Germany at QWIC. “Pre-orders for the coming year are already being gladly taken up, since above all the good availability of the QWIC Portfolio can be underlined. Highlights of this year’s Roadshow were, in addition to the new QWIC Mira, which complements the portfolio in the Comfort segment, many personal conversations, and countless test drives.”
Like last year, the technical corner was very well received. Here, dealers could ask their questions to the QWIC technical service staff. There was also a special counter for the QWIC Dealer Portal where visitors could view the latest novelties and ask questions. QWIC was present with a large team (from the technical service team, representatives, and customer service) and of course, the entire QWIC collection was present and available for testing.
Become a QWIC dealer? QWIC has over 750 dealers in the Netherlands, Belgium, and Germany. Contact the team directly at verkoop@qwic.nl.
On 8 June 2020, deputies in the Vietnamese National Assembly voted by over 94% in favour of the European Union Vietnam Free Trade Agreement (EVFTA).
The EVFTA is expected to come into force from 1st August 2020. From that date onwards, approximately 65% of EU exports to Vietnam and 71 % of EU imports from Vietnam will be exempted from custom duty.
The agreement will cut or eliminate 99% of tariffs on goods traded between the Southeast Asian country and the EU.
It will open up Vietnam’s services, including post, banking and shipping and public procurement markets, align some standards and protect EU food and drinks, such as French champagne or Greek feta cheese, from imitations in Vietnam.
The EVFTA is the European Union’s second deal with a member of the Association of Southeast Asian nations (ASEAN) after Singapore.
Critics in Europe have taken issue with Vietnam’s record on human and labour rights, although the deal does include commitments in those areas.
The World Bank said in May the EVFTA could boost Vietnam’s gross domestic product and exports by 2.4% and 12% respectively by 2030 and lift hundreds of thousands of people out of poverty.
“Such benefits are particularly urgent to lock in positive economic gains as the country responds to the Covid-19 pandemic,” the World Bank said.
Electric bicycles imported from Vietnam are currently subject to 2.5% import duty.
The current world health crisis will result in a decline of 9.2% in EU exports and 8.8% in EU imports from third countries in 2020, according to the EU Chief Economist note, based on the estimated decline in GDP worldwide.
The increasing spread of the virus has prompted many governments to temporarily shut down businesses, and restrict travel and the movement of people. These measures will lead to sharp contractions in the level of economic output, household spending, investment and international trade.
While there is a wealth of forecasts on GDP growth in 2020, there is a limited range of work done on trade projections for 2020, in particular for EU trade.
The analysis outlined in this note is one of the few attempts at predicting the impact of the COVID19 outbreak on trade flows. In order to test the robustness of this analysis, results are also compared to the latest WTO trade forecasts published on 8 April.
