Dont some of the bikes already get made in the USA? the higher end ones? maybe if they can expand their factories and the workforce in the US, that will help them develop some efficiencies in the factories and by importing larger quantities of materials. one thing we will see less of is cheap china bikes. they'll be subject to higher taxes & shipping is already high.

Well... a lot of industries and US companies are hearing similar things. If the only thing the US government did was to impose massive import tariffs, that would probably end in disaster. We have some relevant experience there with Smoot-Hawley. However, if it is part of a bigger picture, like reducing the massive health insurance cost burden imposed on US-based employees, eliminating corporate taxes that penalize domestic manufacturing and weaken international competitiveness, and negotiating offsetting international trade agreements, then it might be OK.

And an aside, the president does not actually have the constitutional power to set a tariff. Only congress can do that, unless congress granted the president a back door.

That was one of the poorest written, least researched and supported article I have seen in a quite a long time. Obviously they have quite an agenda, and I know for a fact that John Burke does. I will never get those few seconds back, and my brain is a bit dumber after reading that.

It might ramp up the cost of American brands due to the potential increase in production costs if they to be built in the US, but I can't see how in the gloabalised world it would significantly affect the price of a giant for example in any market other than the US.

I can't see trek or any other American brand shutting down Far East manufacturing for cheap bikes (and probably expensive bikes) to be sold to markets other than the US.

Having said that who knows what is going to happen.

wow. a potentially interesting topic. horrible article.

the idea at the base of it is pretty simple: if tariffs go up on imports from Asia, and you're importing all the bikes from Asia, yes, they're going to get more expensive. It will make it easier for US manufacturers to compete, at least theoretically. but it could also lead to people buying fewer bicycles.

while this is hypothetical and the article was poorly written, if companies were 'forced' to bring all production to the U.S. this action would have the unintended consequence of accelerating the pace of automation coming to the carbon fiber layup process, which is inevitable. This would ultimately decrease workforce requirements. the administration should probably consult a bit more with economists and rely a little less on gut intuitions.

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wovebike.com | Wove on instagram

Gotta agree here....struck me as quite a bit of fear-mongering and hysterics.

And I am hardly a fan of Trump, so it pains me to even appear to be defending him, but that article ain't worth much.

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Chicago Cubs - 2016 WORLD SERIES Champions!!!!

"If ever the time should come, when vain and aspiring men shall possess the highest seats in government, our country will stand in need of its experienced patriots to prevent its ruin." - Samuel Adams

I think if the USA had the facilities and know-how to produce bicycles and components - much like HED has already begun doing up in Minnesota, it would be a great thing for the USA bike market. But building the kind of bike mfg. infrastructure that Asia has isn't going to happen overnight. So I'm anticipating that if Trump enforces tariffs, it will have a short-term impact (maybe 5 years?) on the price of bikes.

As an American, I'd have to answer "yes" to that question. Especially if there was a decent American company standing behind and supporting the product.

I also think John Burke, CEO of Trek picking a fight with Trump via the Huffington Post is a pretty foolish thing to do as well. I'm anticipating the price of Treks will be going way up, or we'll be seeing some repentance like we've seen from Ford Motor Co.

It makes no sense economically. If Trek bikes somehow get to be manufactured in the US, the cost to Trek goes up and thus the MSRP goes up, and the unit movement would go down. If there were tariffs on bikes not manufactured in the US in order to boost bikes made in the US, the US manufactures would suffer from the corresponding tariffs on exports their bikes to other countries.
The real world evidence on this is not controversial, every economist agrees that protectionism does not work.

If people are willing to pay more(much more in this case) for the same thing because it is made in the USA, then no incentives would be needed and companies would still produce here. But people in general simply are not willing to do that in general.

There is also the issue that Taiwan and China have the best bike factories in the world.

Exactly this....instituting massive tariffs would be devastating to the economy. Prices escalate, consumption decreases and access to overseas markets is closed.

/thread

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Chicago Cubs - 2016 WORLD SERIES Champions!!!!

"If ever the time should come, when vain and aspiring men shall possess the highest seats in government, our country will stand in need of its experienced patriots to prevent its ruin." - Samuel Adams

Much of today's products, bikes included, are priced to market. At $600+, Apple makes a nice profit on the iPhone. If Apples cost of manufacturing goes up due to relocating here, they either stop making the phone or they continue making it, and just make less profit. But it will still be priced at what the what the market with consideration given to the competition. I think this is called, mark to market. It will be the same with bikes. It might affect sales a little, but it also increased the jobs here and there is follow business from having manufacturing here.

In some cases, especially with high volume items, I think what will see some of the foreign (Taiwan, China, etc) companies that have an infrastructure in the far east will start installing one here, and the products will still be made under contract. That is what Foxconn is doing, hence their large capital investment that they just announced. Apple isn't going to make products here, Foxconn is.

I totally agree. Foxconn has started, and it look like Alibaba is also establishing a presence. Pretty smart to get facilities here to avoid the soon to come tariffs.

But they are going to be automated facilities employing just a few engineers to tend to the robots....

If you've ever seen an Amazon facility, you would know better. Lots of jobs, and even if as you suggest, more tax dollar revenue.

That is the thing, politicians are chasing the wrong boogeyman. The vast majority of factory jobs are and will be lost to automation and technology. Higher prices (via fair trade) and higher minimum wages are just going to further usher in this era. In the not so distant future it will be cheaper to automate than pay someone a wage. When that tipping point happens a lot of unskilled jobs are going to disappear very quickly.

It already has reached that tipping point for U.S. wages.

The biggest set back to Trump and the bike industry may be a loss of Federal funds towards alternative transportation. Make the country less bike friendly and watch a flat industry right now start a downward spiral.

While I agree with other posters that the article is weak, the topic is interesting. It got me thinking more about the economic implications for americans of US manufacturing vs overseas manufacturing, and what it was exactly that got trump elected as president.

What you wrote above is true, protectionism is in general a negative in rational economic terms. But there is a bit of a problem: humans, especially when making economic and political decisions, are far from rational.

So, yes, free trade means that, among other things, consumers benefit economically, as 95% of what we buy gets a little bit cheaper which means that there is a huge economic benefit when it is all added up among all of the people that get the benefit (the vast majority, if not all, of the US population). But, free trade also means that, in spite of cheaper prices and other benefits, a non-trivial number of people are thrown out of work, or lose well paying jobs and now have to work at much lower paying jobs. But, in purely rational terms, that economic loss is still far less than the economic benefits of free trade.

But, since humans are not rational, as a whole, our US population feels the pain of job/wage loss far more than the benefit of slightly better prices for everyone across the board. And that feeling of pain, while perhaps not rational in economic terms, is how the voters got us to where we are (politically) today.

Or, at least, this is my theory, but I'm not by any stretch an economist.

(On a compete side note, we do happen to manufacture in the usa, so, trump or no trump, we'll keep on doing what we always have ... )

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Assume the average cost of a carbon bike frame is less than $500; with $400 of that direct material and $100 direct labor. The difference between what you pay -- say $3,500 -- goes to R&D, marketing, distribution, and profit. All but the direct labor is most likely already done in the US.

Even if the cost of direct labor doubles, the end cost to the consumer shouldn't, in theory, be much. Also, other than high-end Toray fiber, most carbon is already manufactured in the US.

But I'm assuming the bike manufacturers will use your concern as an excuse to raise prices... which they probably will be able to do successfully if tariffs go up on imported frames.

On the bright side, 'Merica WILL be great... again!

It seems to be working pretty well for China.

Amazon is a retailer. But the company is also invested in robot technology.
https://www.bloomberg.com/news/articles/2016-06-29/how-amazon-triggered-a-robot-arms-race


Looking to Germany will tell us a lot about how manufacturing will look like, skilled workers and automation.
Technology, code and robots will be the new worker.

"or they continue making it, and just make less profit."

This is the funniest thing I've read all day.

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Yup. You know what they've figured out? Labor isn't expensive anymore because you can just use robots. Might as well locate manufacturing close to one of your largest markets. Proximity to cheap electricity doesn't hurt either.

I see an opportunity for 3rd party manufacturers to contract to various companies to move a portion of their manufacturing to the US and leaving some in Taiwan for the rest of the global market.

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___________________________________________
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2020 National Masters Champion - M40-44 - 400m IM
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protectionism doesn't work for the overall economy, at least according to economists, who must know something.
but even if the cons outweigh the pros, it still has winners and losers.

besides, soon we'll be winning so much we'll be tired of winning. we'll all have carbon fiber American-made bikes and anyone who spells it 'fibre' will be deported.

There doesn't seem to be much of an acknowledgement of the effect of other countries reciprocating. I can image Boeing losing a multi-billion dollar order to Airbus over some stupid dispute over trade. These things make bike parts look pretty trivial. The funny thing is that US agriculture probably stands to lose the most and they overwhelmingly voted for the Donald. The Pacific rim is a huge potential export market for beef and pork, but you don't think they will feel like buying from the US if they are getting screwed.

Human behavior is incredibly rational and predictable given a basic understanding of the 'rules of the game'. Make a three pointer in basketball worth 10 points and prepare to witness behavior changing in a very predictable way. This is all the more evident in consumer behavior. Case in point, the vast majority of consumers on this board openly admit to buying their components from online retailers at a fraction of the price of their LBS, even though they know that this behavior may ultimately lead to the demise of their local shop. They know they really should support their LBS, but there is a very predictable tipping point at which the consumer says they are not willing to pay a premium above X %. You can argue that the consumer is behaving irrationally for taking the short term gain in lieu of the long term health of their local economy, but that doesn't mean the consumer isn't acting in a rational and very predictable way.

Entry-level bike prices will go up immediately and for quite a while, as corps will try to figure out how to keep profit margins for the 1%, while building all those high wage assembly lines/facilities.

Meanwhile everybody will just have to take out a loan to buy a Triathlon bike, but the Don promised us the paradise is just around the corner and we just should suck it up a little...just long enough to make them lending us their money worthwhile.

Sounds good to me...won't be buying a bike for 4 years, probably will have to take out loan anyway to just buy food or shelter. Bikes are really just a luxury item and more pressing are the same developments happening in more essential area of life.

The Cannondale Bedford (Pennsylvania) factory produced and produces bicycles. Lost the carbon fiber production to overseas production due to cost savings.

Just a question for the group.... How does ENVE, which is made in the US, compete against the foreign wheels? Trek made their Bontrager wheels here for a long time, and supposedly make their 9 series bikes here. Other then infrastructure needs, once that is established it will allow products to come to market considerably faster as well.

i am just returning from the TBI conference and this has already begun to change the behavior of bike makers. trumps election is bringing production back to the U.S. because of the fear and uncertainty of his policies and temperament. but this is limited to bikes at $3000 and up.

the last i heard, the carbon fiber manufacturing (the fiber, the pre-preg) was dominated by china. i may be way off on this, but i think one consideration, if we got ourselves into a trade war, is whether we have enough carbon fiber manufacturing in the U.S. to keep up with a surge in U.S. manufacturing. even if bike frames could instantly cheaply be made in the U.S., tarifs on carbon fiber and on all the parts would push prices way up. yes, we could move to U.S.-based SRAM parts but many of those parts are, as far as i know, also made in asia.

beyond this, i don't know if i'm going to be traveling to cuba next month to watch the triathlon in havana because i don't know how our relations with cuba may change between now and then.

so, yes, the election is affecting our sport.

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Dan Empfield
aka Slowman

That assumes tariffs would apply equally to parts AND finished goods.

That's the thing about trade wars. They're like kinetic wars. Or lawsuits. Or affairs. Or drug habits. Once you start they on take lives of their own. Once you set them in motion you're quickly disabused of the fiction you can control what you began.

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Dan Empfield
aka Slowman

Here's the thing that NO ONE talks about in these discussions about trade and manufacturing.

Let's look at one small category - wetsuits. ALL the wetsuits in the world are now made in about 4 - 5 factories in China (tri wetsuits included). This is a business and a market that the Chinese manufacturers - there is a bit of a range in quality, but the quality from the best manufacturers over in China is outstanding! I'm told the factories are all good and clean. The Managers over in China good and easy to deal with (I've had to deal with some of them). They have the wetsuit business all figured out over there.

In the triathlon business the last company in the wetsuit business to have wetsuits made in "North America" (Mexico) had almost an entire year run of wetsuits fall apart!

Bottom line - you can now buy a great, well fitted and well made triathlon wetsuit for $500 or less.

Just looking at THIS business, what is the solution then to Trump's idea to, "Buy American and hire American"?

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Steve Fleck @stevefleck | Blog

Trump and cycling?

Give the guy credit - he may have been ahead of his time - https://cyclingtips.com/...to-american-cycling/

This is a great read!

However true to current form, Trump bragged and boasted, saying that the Tour de Trump would, "Rival the Tour de France" one day! Also true to current form, he had a short attention span and was in and out of the bike racing business rather quickly! :)

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Steve Fleck @stevefleck | Blog

That was my first thought

How much more can a Walmart bike cost with a "Made in USA" sticker on it vs. the ones they sell now? 10%?

But what would be the point, if there's no safe place for people to ride them, anyway?

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"What's your claim?" - Ben Gravy
"Your best work is the work you're excited about" - Rick Rubin

I already have one.

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Pink? Maybe. Maybe not. You decide.

Significantly more than that.....as someone who has direct experience in this area, the labor costs on a mass merchant bike are a pretty significant percentage of total product costs.

Which bring sup another relevant point - there is no infrastructure in thsi country to support mass production of bicycles. You need a wide array of component suppliers and the taiwanese (who own most of the component and bike factories in China) are not gonna be very interested in opening up US facilities. Again, having direct experience here, no component suppliers or factory ahd any interest in setting up shop in Mexico back around 99 / 00 because they viewed it as a step towards their own eventual demise.

So even if you set up a bike facotry here in the US, you will still need to import nearly ALL of the components needed to build the bike......assuming those massive tariffs go through, all those components would be subject to them.

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Chicago Cubs - 2016 WORLD SERIES Champions!!!!

"If ever the time should come, when vain and aspiring men shall possess the highest seats in government, our country will stand in need of its experienced patriots to prevent its ruin." - Samuel Adams

There is quite a bit of carbon fiber production in the US (incl Hexcel, Toray, Cytec-Solvay, MItsubishi), as well as prepreg. None of the companies are 'American' though - they just manufacture carbon fiber and prepreg here. However, as far as I know almost everything goes into aerospace or military applications. I think the bike manufacturers will have a tough time getting more prepreg from the US suppliers because their volumes are tiny compared to aerospace.

Good point ... it's not there's a full-production-line Schwinn factory just sitting around vacant, waiting for someone to push the green button and turn it back on

Thanks

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"What's your claim?" - Ben Gravy
"Your best work is the work you're excited about" - Rick Rubin

So even if you set up a bike facotry here in the US, you will still need to import nearly ALL of the components needed to build the bike......assuming those massive tariffs go through, all those components would be subject to them.


What's happened over the course of the last 20+ years is that industries like the bike business have become rather complicated and highly evolved in terms of their supply chains. Consumers have become WAY more demanding and discriminating with their wants/needs. Manufacturers have delivered ever greater technology and improvements - and this has gone on and trickled down through model lines in the bike business. That $3,500 Ultegra Bike of today, was very similar in quality and performance, if not the same, to the bikes that were winning the Tour de France and IRONMAN races just a few short years ago! It's a great time to be a bike consumer!

It's NOT easy to un-do all that, but that is the simplistic language that Trump wants to use. It's WAY over simplified. It appeals to Trump supporters, but with all due respect, they don't seem to understand what's happened in the last 20+ years! You can't just wave a magic wand and change it all!

BTW Trump's "Make America Great Again" hats, I heard were made in China! Could have been #FakeNews - lot's of that going around! :)

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Steve Fleck @stevefleck | Blog

Could also apply to much more of our goods. An area I have some experience is clothing, but as stated, wetsuits, helmets, etc. At a time when triathlon is struggling for more participants, this may be pretty impactful.

The way you quoted that made it look like I said that. I would not say something so naïve. If anything, any change in manufacturing or supply business forced upon a manufacturer by regulations will be an excuse to raise prices even if manufacturer's costs have gone up only nominally.

Not exactly.
Human behavior, even economic human behavior, is not by any stretch rational. It's been shown and been proven to be highly irrational.

However, irrational human economic behavior is, oddly, still predictable. Well, statistically predictable at least on the micro level.

Check out, "Predictably Irrational," by researcher and behavior economist Dan Ariely. It is a truly outstanding book on this very topic.

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Not sure when that was. Are you talking about QR suits? What time period are you talking about?

I had a fully US made wetsuit in the early 1990s (made by ProMotion in OR, but they have since outsourced to Asia). It was an outstanding wetsuit, it lasted a long long long time, and it was far better than what ProMotion sells today ...

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Advanced Aero TopTube Storage for Road, Gravel, & Tri...ZeroSlip & Direct-mount, made in the USA.
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fleck is talking about a good few years later when rules were introduced that you could not use certain glues anymore in the Usa

What glues were restricted?

Federal regs or state regs?

What year or time period?

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Advanced Aero TopTube Storage for Road, Gravel, & Tri...ZeroSlip & Direct-mount, made in the USA.
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politics in everything these days

My guess is anyone that contained Trichloroethane. Its use was restricted in the mid 1990s.

I'm just glad I don't live in the US and am staring down the barrel of higher bike prices just so Donald can collect more taxes/import tariffs

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TriDork

"Happiness is a myth. All you can hope for is to get laid once in a while, drunk once in a while and to eat chocolate every day"

As a completely impartial (i.e. overseas) observer...

It's going to be interesting watching what goes on over there, and how it impacts on everyone else. TPP already canned it seems.

I'm curious to know why President T isn't going after all those companies that are hugely successful, and yet pay little tax due to the various loopholes, overseas bases, etc etc. But then he's pretty good at not paying tax too?

Hmmm.

What hasn't been acknowledged is that other countries already have protectionist policies and the U.S. has not reciprocated. Where is the reciprocation for China only allowing thirty-four foreign movies per year to open in Chinese theaters? Where is the reciprocation for our most successful internet companies being shut out of China? Where is the reciprocation for foreign companies being forced to partner with Chinese companies to do business in China? If there is going to be free trade then it has to cut both ways, otherwise we are China's bitch.

Well, hyper-successful people and businesses are winners, especially if they tear up the planet to get there. Everybody else are losers. To the winners go the spoils and people that lose shouldn't just lose, but they should be punished. Gold doesn't shine as nicely unless everybody else is covered in dirty rags.

http://www.politifact.com/...-have-kept-Iraq-oil/

Since he is now signing orders to give away our public lands to oil companies, a mountain bike isn't going to be much use anyway. And now that Trump-inspired Montana is trying to pass a bill that outlaws riding bikes on roads in rural areas, you won't need a road bike either.

http://www.cyclingweekly.co.uk/...mp;utm_medium=Social

Listen, if you have to ride a bike to get places, then you're just poor and need to work harder so you can get a Bentley already and quit slumming around like your waitstaff. Your butler should be riding a bike, not you.

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This hits it on the head. Thank you.

it was funny when trump complained about german cars the other day.
from what i undestand trump ,in his buisness ,deals a lot with the german bank ...as most amercian banks would not deal with him anymore...

I agree with this. I live in Taiwan and have seem much of this in personal experience in business. The problem for many crucial US exports to China is that they are agricultural products, cultural products and internet businesses. So on the pretext of consumer safety, Asian markets reduce access for US beef due to BSE. Limit pork imports because of US use of ractopamine. Firewall FB etc due to censorship issues. And behind these walls China builds WeChat (which totally destroys What'sApp in every aspect of functionality), taibao, etc etc. But the argument from them (incorrect) will always be these are domestic issues.

As for the bike industry under Trump...I agree it's technology not trade that is killing jobs. Bringing highly automated factories to the US (I'm not sure why everyone keeps saying 'back to the US' as the big players in manufacturing today are not and have never been American.) will not magically bring back the jobs that the president has promised. On the flip side, however, it could be a real boon to innovation and customization for bikes manufactured close to their customers. Change is never all good or all bad...it will be interesting to see what evolves out of this. If Trump can use this to rebalance trade, then I think it's good for all sides. The environmental destruction in many parts of China caused by the manufacture of cheap goods destined for the US market is appalling.

I'm in the camp that argues the US has a lot to lose in a trade war with China. Americans should consider how other countries will crush US exports just as America crushes theirs. Boeing has been mentioned and is a prime example of how this will cost a lot of well paid, highly skilled jobs that at best will be replaced by low wage, low skill jobs, but more than likely, simply replaced with automation. Sounds like a winning plan to me.

I can take a guess where the "reciprocation" is.

The US would not have agreed to the "bad" trade deals that we have with China unless we (the US) is/are already China's b*tch.

So, clearly, they already have us by the short hairs. How? Well, if you're an American, just take a look around your house (triathlon equipment included). If you're anything close to typical, 90% to 95% of the things in your house came from China.

Imagine if that pipeline all of a sudden stopped.
I think the US would, plain and simple, grind to a halt ...

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x1000

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I guess people will have to settle for Ultegra instead of Dura Ace on their next Trek purchase.

While absolutely true, it is worth noting that it is the US and Western companies which are largely driving change in this area, as well as in social areas such as working hours and conditions.

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Chicago Cubs - 2016 WORLD SERIES Champions!!!!

"If ever the time should come, when vain and aspiring men shall possess the highest seats in government, our country will stand in need of its experienced patriots to prevent its ruin." - Samuel Adams