US president Donald Trump began his first week in office by abandoning the Trans-Pacific Partnership and threatening a “very major” border tax for companies who take production outside of the US. With Brexit underway and similar protectionist policies being pursued in the UK, I’m curious about what this general trend could mean for bikes.
Specifically, will bikes made in Taiwan and China — which is most of them, by the way — become more expensive in the US and the UK? Possibly. And, to pursue this theoretical scenario further, could protectionist taxes make domestically made bikes and gear more attractive for brands to produce and riders to buy?
On Monday Trump reiterated the idea of punishing companies that move production off US soil with a “very major” border tax. In a meeting with CEOs of major American companies, Trump’s plan seemed to focus on companies’ future actions, not those who already produce in Asia and elsewhere.
I asked a number of bike companies what protectionist tariffs could mean for cycling. None really wanted to touch the subject, with most declining comment and a few giving me a vanilla ‘we’re always paying attention to global trends’ type response.
Big brand or boutique?
Like so many things these days, the majority of cycling products are made in Asia. Specialized, Pinarello, Trek, Cannondale …. virtually all of the major bike brands buy from factories in Taiwan. (And Giant of course owns its own Taiwanese production.)
Most western brands simply can’t compete price-wise with domestic labor. Taiwan has been building high-end bikes for long enough, at such a volume, that the country leads the world in the category. Years ago I visited Cervélo’s R&D facility in California, where the Canadian company was doing some of its cutting-edge, exploratory, high-end work. The majority of the bike-specific machines in that building were labeled not in English but in Chinese. Point is, Taiwan knows bikes, and most of the world’s best come from there.
But for brands based outside of Asia — in, say, Australia or the UK or the US — wouldn’t it be cool for production to be done in-house? Wouldn’t we as cyclists love to do a factory tour? That reality ended years ago for the big brands.
On the other end of the spectrum, many boutique brands in the UK and the US do their own small-scale production. In Boulder, for example, Mosaic hand-builds some beautiful frames. Many of Mosaic founder Aaron Barcheck’s fans love not only his quality product, but the fact that you can just ride over and talk to the guy while he’s working.
However, the price of boutique is simply too high for many of us. And there isn’t much of a middle ground between boutique and big brand.
“We must protect our borders from the ravages of other countries making our products”
The above was one of Trump’s quotes from his inaugural address, a standard riff on his ‘America First’ theme. As relates to bikes, I don’t believe we are being ravaged by Merida or Giant or other quality Taiwanese factories producing bikes for many global brands. They make good bikes, and we’re happy to buy them.
But, it turns out, neither Trump nor UK Prime Minister Theresa May nor any other global leader asks my opinion on these things, and it appears that protectionist tariffs could be coming in some form to the UK and the US.
One new bike company that’s caught my interest is HIA Velo. HIA stands for Handmade in America. As the name implies, HIA Velo is swimming against the current of Asian manufacturing. Shimano Ultegra bikes start at $4,000. HIA Velo could arguably benefit from protectionist tariffs. I wish these guys the best of luck.
Another brand that I and many other Americans riders are eager to finally have access to is Canyon, which will open its US business later this year. Designed in Germany, made in Asia. Quality bikes at good prices. Canyon could arguably be hurt by protectionist tariffs. I also wish this operation nothing but the best.
I’m not as well versed on made-in-the-UK brands, but I know there are similar factors at play: buy local for more, or buy imported for less.
Political talk may seem out of place on a bike site. I get it. Escape from the real world is one of the many reasons I ride a bike. But the fact is, money talks, whether you are a brand looking at manufacturing costs or a rider looking at the retail price of a bike.
Personally, I would love to see more bikes, gear and apparel made where it is designed, whether that is Italy or Taiwan or Germany or the UK or the US. But I’m skeptical that the core of cycling production in Asia could be uprooted at this point.
It’s going to be an interesting ride.