Yep - I head a story on NPR over the weekend how they estimate prices will go up by around 20%. Not a huge deal on a $100 bike, but for top end stuff the tariffs could had a couple thousand!

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Blog: http://262toboylstonstreet.blogspot.com/
https://twitter.com/NateThomasTri
Coaching: https://bybtricoaching.com/ - accepting athletes for 2023

Not too many top end bikes made in China. There are some but an athlete will have plenty of top quality choices at current prices ( still too high :-) )

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Dan Kennison

facebook: @triPremierBike
http://www.PremierBike.com
http://www.PositionOneSports.com

Considering how small tri is and the athlete turn over.. just buy used. Much more sustainable environmentally

But what about when 13 speed comes out? Gonna need that...

And here's the contrasting article at the same website by the same author. Pick your viewpoint...
https://www.bicycleretailer.com/...ncrease#.XNm3R9h7m00

The gist is that good or bad is based largely on whether someone views international trade in a short-term or long-term perspective and whether someone believes that China competes fairly. If there is a nation that subsidizes a segment of the market in order to drive out competition in another nation, then tariffs are a very, very good thing for that other nation.

People looking at a $100 bike may not be able to afford the extra $20. On the flip side, those of us with nice bikes likely can, but would just prefer not to.

If bikes were made in the U.S.A, there wouldn't be a problem!

I was able to look past the misogny, racism, emoluments clause violations, cronyism, and general buffoonery, but this a bridge too far.

Haha! Don't fuck with my hobbies.

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https://connect.garmin.com/modern/profile/domingjm

My first pair of Nike were made in the USA...something I haven't seen since a kid. Cervelo had the P5X made here (maybe it still is?)...we have ABG who made the QR Ti frames. We have Dean in Colorado, there are numerous brands in the US. Not sure if Merlin is still around--but if more could be made here, that would be awesome.

Employ US folks, better distribution and warranty resolutions, we have HED, ZIPP, other wheel makers...yeah, we should build more top end carbon bikes here too. If we have the knowledge for Stealth tech, we should have enough for the bike industry. **Disclosure: I know nothing about making bikes, wheels, or their costs or QC...just stating a wish list to avoid tariffs.

That statement might be less pink than you know... and apply to a whole lot more than our cycling toys.

"I know the challenges this county's up against. Here's the thing about those discount suppliers. They don't care. They come in, they undercut everything, and they run us out of business, and then, once we're all gone, they jack up the prices." - Michael Scott, Dunder Mifflin Paper Company

This is not a problem for the enthusiasts here. As the article makes clear, this is only likely to affect entry level, mass-market, department store or kid's bikes. Anything mid-tier or higher is generally made in Taiwan and unaffected by these tariffs. Similarly, most good components are not made in China. For example, Shimano makes most everything in Malaysia.

I think we’ll survive.

Sure, but my 2011 n.P3 was made in China.

Where are most tri Cervelos (except P5X) made these days?

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Advanced Aero TopTube Storage for Road, Gravel, & Tri...ZeroSlip & Direct-mount, made in the USA.
DarkSpeedWorks.com.....Reviews.....Insta.....Facebook
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Carbon frame manufacturing is far more capital intensive than most metal bike manufacturing. Also, the economies of scale in carbon manufacturing are very powerful. The supply chain and necessary scale for high end carbon frame manufacturing is all in Asia these days (primarily Taiwan). In addition, the skilled labor and engineering prowess is also all in Asia these days. American carbon frames would either be lower quality or vastly more expensive than comparable Asian frames.

Speaking of "stealth" (and to get political here), tariffs are nothing more than a politically palatable way to support US companies by levying a tax on American consumers. We the consumers are ALWAYS losers with tariffs. Politicians like to pretend it's a free lunch. Tariffs are almost always value destructive and inefficient. If you want to help American companies, it would be more efficient to just give them money, like the Chinese do.

I guess since the US government ‘s official stance is the “one China policy” this also applies to Taiwan stuff too?

China, all aside from the P5X and RCa have been for a long time

Trek also makes about 90% of their bikes in China.

And its not just Cervelo. I've seen several other popular brands being made in Chinese factories I've visited...

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"I'm thinking of a number between 1 and 10, and I don't know why!"

Some of the high end bikes will be ok as they're made in Taiwan at Giant. But they do a lot of carbon at Quest in China.
If it turns out that Taiwan is exempt Trek would have the option of spreading the increases across models so it's a lower percentage. Or they may already have booked their future production in Taiwan

Why would Taiwan be affected by Chinese tarrifs? They're not the same country.

The US government doesn't formally recognise Taiwan as a separate country. Though they do negotiate with them separately from China.
Last I heard Taiwan was not exempt from the tariffs on steel and aluminium, but I don't follow the issue all that closely as I'm not in the USA

Oh wow, I didn't know that! Of course, two places with a tied history, but very distinct places with their own systems of government, and economies.

I have heard that a lot of these Chinese companies moved their production to Vietnam. Not sure how many, maybe the rest after this latest round. So we get our cheap bikes, China gets all the profits, and Vietnam gets badly need jobs..Winners all around!!!

Just buy online from the European retailers - like what we already do for components.

So many things you don't understand...

The best economy and by far the greatest rise in living standards occurred when we made nearly everything in the US. Living standards have been virtually flat since the late 70s when the government actively began supporting trade deficits (under the guise of "free" trade), and filling the hole with escalating debt. In other words we took a 50% paycut to save 5% on cheap imports. But hey, profits are way up!

Trade isn't a problem but perpetual trade deficits are. And the great majority of it is with China.

BTW, I'm sure as hell not a Trump supporter...

Perpetual trade deficits are not a problem. If they were the US would have been in deep trouble a long time ago. To paraphrase Milton Friedman, we send (digitized) pieces of paper in the form of US currency to China and they send us bicycles in return. Who is getting the better deal? As long as the US dollar is the global reserve currency there can never be a shortage of dollars and the US can never default. We can just keep on printing dollars and the Chinese will keep sending us bicycles. Tariffs, in the other hand, are a tax on consumers and contrary to Trump's idiotic statements, China does not pay - we pay.

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Andrew Inkpen

We *are* in deep shit, relatively. Median real income has been flat for 40 years. Actually it went up about 10%, but in the prior 38 years it climbed >200%.

Digitized pieces of paper... BS. They are claims on real assets. The Chinese can use those $$$ to buy US land, buildings, and businesses. You need to look at the actual effects; depressed wages and escalating debt. Friedman is famous because he was an apologist for big business. "The US" can get away with a lot of things because they are by far the largest developed country in the world, with half the world's military budget. But the things that they are getting away with are not in the interests of 99+% of the population.

yes China could have bought assets yes but no they bough US debt and this has no asset backing whatsoever... I think the worst thing that is happening before our very eyes it the beginning of replacement if US as the main reserve currency ... and that will be when US starts having really big problems.

And what currency can replace the US$? Certainly not China's - a country that does not allow its own citizens to invest outside China and that censors financial news. The Euro? Not a chance. The US$ will be the reserve currency for a long time.

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Andrew Inkpen

you will see RMB will first rise as a transactional currency and will become more of a reserve one...
thats what the new One Belt One Road project is about they will entice nations to start trading in RMB.

nations do realise that USD give US too much power - like for example with IRAN - despite the fact the european countries would want to keep the deal the fact that all the corporates settle in USD makes it easy to enforce US policy on non US domiciled companies. ANd with what Trum is doing reduces the trust and makes other nations eager to have some alternatives.

They buy our debt so we can maintain a trade deficit (without tanking the currency), and they can keep increasing production and selling it to us. It's pretty obvious who this is good for! Look at the US economy and profit vs wage growth over the last 20 years vs China.

If the US$ was no longer the reserve currency, the exchange value of the $ would decline, and production, exports, and wages would increase. The trade deficit would disappear. Hardly a disaster for people who work for a living.

So you don't like M. Friedman. How about W. Buffett - "For 240 years it's been a terrible mistake to bet against America, and now is no time to start."

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Andrew Inkpen

I am not saying that China didnt benefit - but it also means that US could have kept inflation low and focus on more value added industries ande develop them; it provided products to masses for fraction of the cost but I am also saying that China holding so much of US debt allowed US to increase its deficit to 22 tn USD.

and aside of the note about production - many people dont realise that during this time China's society is much more technologically advanced than most of the developed markets.

Good for domestic brands like Guerrilla Gravity which has, supposedly, figured out a way to partially automate the labor intensive layup process.

I largely agree with this though there is a caveat: domestic employment is the core of the Chinese economic model. If you don't play ball with the Communist Party's goals... you might die mysteriously or outright get executed without a trial. Crazy stat: between 2003 and 2011 a Chinese Billionaire died every 40 days.


So, yes, right now certain Chinese companies are setting up manufacturing operations in foreign countries but, IMO, there's a limit to this from the perspective of China's political system. For the time being it's acceptable because China is facing a dollar funding crunch so whatever mechanism gets dollars into the country is acceptable (the on-shore dollar denominated funding market is $900 billion, China's liquid dollar denominated FX reserves are ~$1trillion so you can see that the buffer is discomfortingly small especially given how... ahem... "loose" lending standards are in China.) However, once China eventually devalues the Renminbi the impetus to bring in dollars will become secondary to employment considerations again.

The RMB will never be a reserve currency. Not in the lifetime of anyone posting on this board. This is for a constellation of reasons with primary reasons below:

• If the Chinese made the RMB fully convertible, it would plummet and domestic inflation would skyrocket (good for stabilizing their property market, bad for commodity imports)
• If the Chinese made the RMB fully convertible capital would fly out of the country at a dizzying pace. The old troupe about Chinese millionaires trying to get their money out of the country is true.
• China's legal system is opaque to put things mildly. They don't have much of a track record when it comes to protecting property rights or upholding contract law (huge understatement)
• If you're wealthy and you don't fall in line with the goals of the Communist Party, there's a good chance they'll straight-up execute you. See my post above.

It is true that the USD will remain global reserve currency for the foreseeable future but that does not mean that there aren't consequence for intentionally gutting our own domestic production. It's incredibly naive to think otherwise. Also, anyone who's familiar with economic history knows the context as to why Friedman said what he said. Friedman thought that we could co-op China into part of the Bretton Woods system and that trade in goods would lead to trade in ideas and that, over time, China would transition to become a more open Democracy. Friedman, like most people, was "talking his book."

Starting with the framework that "real" production increases with specialization and trade, we must now decide how that increase is distributed. One of the problems with a globalized system is that Capital is mobile but Labor is not. Accordingly, the gains due to global trade primarily accrue to capital. It's not a coincidence that the rise in both wealth and income inequality in the U.S. coincided with the decline of U.S. manufacturing. It's not the only factor by any means but it is certainly a factor. It's not an exaggeration to say that we sacrificed the middle class of the U.S. to build one in Asia.

Wages and living standard. Not stock market.

its quite strange talking about loose lending standards in China .. what do you mean by that?

also i think a concept of what "middle class" differs between the countires...

Just my observation is that i dont think the standards of living are worse than in the past just that other people have much better standards of living

Correction. We sacrificed the US middle class so the top .01% could become insanely wealthy. The benefit to the Asian middle class was a side effect.

What happened in the US is not a consequence of trade. Rather it's a consequence of what happens when democracy is functionally dead, and the oligarchy manipulates policies to benefit only themselves. The propaganda works so well that hardly anyone is even aware of it...

coming back to bikes...

do we think that the tri bike developments be as fast without cheap production facilities in China?

how about wheels - i still remember the excitement when Flo wheels started - their business was built on sending production to china and providing wheels to the masses.

If the price of goods from China goes up it allows factories in other countries to raise prices and still be competitive. So prices will go up. And wages will stagnate or decrease as other industries sell less. So you'll have less money to spend on more expensive parts.

Don't be such a turd

Unless Flo changed their supplier recently, their wheels are made in Taiwan, not mainland China.

People never talk about the currency of ideas and that's the one place where I give the giant Cheeto a little leeway. Intellectual theft and fraud by China's part doesn't just flood us with cheap knockoffs, but it steals good paying innovative jobs from the US.

You don't necessarily want a bunch of minimum wage jobs back in the US assembling groupsets or frames.

You DO want good paying jobs designing and marketing bikes and parts.

The intellectual property theft hits both fronts. I'm OK with attacking them on that front.

It's similar to the drug war stuff though, it's all in who and how you go after it. There's lots of people and companies in the US making money peddling fake goods.

Toss some people in prison for peddling known fakes (you know, folks selling "Easston" and "Zippp" handlebars for like $45).

I really can't stand the big T, and tariffs suck. But I'd like to see China kicked in the shins a little bit for the rampant theft of everything from everyone they can't develop themselves.

Flo ditching their original China manufacturing partner and moving operations to Taiwan turned out to be a fantastic decision. Ultimately though, even Taiwanese exports are going to go up in price (as they source most of their raw materials from mainland China.)

Theres not a tariff between Taiwan & China, so why would their raw materials become more expensive?

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float , hammer , and jog

Because China will eventually have to pass the expense of paying the USA tariffs, an expense they've never had to pay.

China, and Chinese businesses, don't pay the tariffs. US businesses that import those Chinese goods do. Any financial cost to China will be from lost revenue due to US businesses importing fewer goods...

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"I'm thinking of a number between 1 and 10, and I don't know why!"

When comparing any "class" between countries you really need to do so on a PPP basis.

https://chinapower.csis.org/china-middle-class/
https://foreignpolicy.com/...adder-behind-itself/

We've always been Taiwan. We spoke with a Chinese factory in the beginning during the R&D phase, but they turned out to be a disaster. To date, every FLO product every sold has been manufactured Taiwan.

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Chris Thornham
Co-Founder And Previous Owner Of FLO Cycling

Here's a good starter but what you should really pay attention to are the recent Chinese on-shore bond defaults where companies routinely claimed to have 10x their outstanding debt in cash on their balance sheet and then, one day, they just default. This has happened about a dozen times since December. Why? The loan underwriting process is basically "Do you have any connections to the CPC or are you blacklisted by the government in any way?" If the answers are "yes" and "no" then you're approved. Need to take out a loan to build a factory? Great! Need to take out a loan for payroll and to buy raw inputs? Great! Production didn't sell and you're about to default? Well.... take out another loan! Ad infinitum.

A few months ago i ordered some custom mountain bike wheels from one of the Chinese manufacturers out there (BTLOS). I sort of felt guilty going direct to China like that but then realized all the lower level parts (except maybe valve stem) were made outside China. The Toray carbon from Japan, the DT Swiss hubs from...well Switzerland and Sapim spokes and nipples from Belgium. So the Chinese just provided the labor and they are very good at carbon fabrication. You can really see the global supply chain in the bike world...at least the higher end stuff.

Not just the US. The tariffs are only on what China supplies. Many bikes are assembled in the US from imported parts, so the tariff only applies to what came out of China. Both Shimano and SRAM are made elsewhere, so that's the group set and wheels in most cases. Seats and handlebars are also made in other places. If only the frame comes from China, even on a high end bike, the 25% would be on about 25% of the total cost.

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"...the street finds its own uses for things"

In a parallel story, bikes and bike parts made in the USA are on the proposed list for tarriffs to be imposed by the EU, in the next iteration of protectionism & retaliation.
Round 1
America puts protectionist tarriffs on aluminium, steel, etc.... EU applies WTO-sanctioned retaliatory tariffs, on things that will hit certain produce from the USA... orange juice, peanuts, kayaks, big ugly unreliable agricultural motor bikes.

Round 2... Trump puts more tarriffs on more stuff. Cheese, wine, Campag, aeroplanes without inbuilt software faults etc.
EU responds (with WTO permission again) - inc bicycles and components.
http://europa.eu/...se_IP-19-2162_en.htm

Hmmm...

This is more Lavender Room, but I think you might be conflating trade deficit and the Federal budget deficit? Those two accounts are two completely different "ledgers." Trade deficit is mostly private. Federal deficit is entirely public. There is some indirect connection, e.g. taxpayers not having to fully pay off the annual budget deficit gives us some disposable income we wouldn't otherwise have. And some of that extra income is spent overseas (but some is spent locally!) But it's a bit of a stretch to imply such a strong, causal connection as you do.

I think the real answer is just stupid simple: stuff is cheaper to make in other countries with lower standards of living and therefore lower labor rates. And we're not stupid: given the option and other things more-or-less equal, we buy the less expensive thing instead of the more expensive thing. People in other countries also buy the less expensive thing. End result: trade deficit. Just look at carbon wheels. Why buy the $3000 Enve when you can buy the $1000 Flo. (or whatever the price differential is). Enve's are great. Personally, I own Flo wheels to get 90-something percent of performance for 1/3 the price.

There are bikes like this, but it is a tiny tiny tiny percentage of the total.

The vast majority of bikes sold in the usa are both made AND assembled in taiwan (small part) and china (huge part).

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Advanced Aero TopTube Storage for Road, Gravel, & Tri...ZeroSlip & Direct-mount, made in the USA.
DarkSpeedWorks.com.....Reviews.....Insta.....Facebook
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Look up "twin deficits phenomena". Any country that produces less than it consumes will usually need to increase debt to make up the difference. Same as an individual. And as debt rises a country's "credit rating" will fall along with the exchange value of the currency. If you want a high trade deficit (and the people running this country do), you have to take measures to ensure that doesn't happen. It's a deal we apparently make with countries when we absorb their excess production... they buy our debt.

Most developed countries don't have a trade deficit; rather a surplus. Why is that? Taiwan where a lot of bike parts and high tech equipment are made isn't even a poor country. GDP/capita PPP is nearly as high as the US.

You can do it in North America from start to finish, in fact there are several advantages (say for wheels) to keeping everything in house (IE moulding and tooling on site):

https://nsmb.com/...osites-dustin-adams/

Maurice

Geez they need a like button on this forum.

to tell you - the bond default rate onshore was 0.8% as percentage of the overall market and 1.6% percent if you look only at high yield part of their market, china is the second biggest bond market after the us - that happened last year under pressure of trade war and market sell off. Care to venture what was default rate for bonds in the US; during the goldilocks for US economy??

Hello DarkSpeedWorks and All,

https://www.bicycleretailer.com/...9044095#.XOiBTYhKhEZ

Excerpt:

The total value of all global imports of the products we counted was $2.2 billion last year, meaning that Chinese imports accounted for exactly half of bike-related imports last year in those categories. If you count bikes instead of dollars, 95% of bike imports came from China last year.

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Trade World War: Bike industry caught up in tariff battles with China and Europe
WASHINGTON (BRAIN) — Some praise them, some loath them, but there's no denying that the U.S. bike industry — largely an importing industry — is feeling the effects of increased tariffs on Chinese imports, proposed tariffs on European imports, and tariffs on imported steel and aluminum.
BRAIN's coverage this week includes:

• Tariff Timeline: How we got here
• Some U.S. manufacturers support tariffs
• Industry testifies against EU tariffs
• What we import from China
• OIA tells Trum tariffs 'a huge hit'
• Tariffs may hit entry level/juvenile bikes hardest

Read More

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Cheers, Neal

+1 mph Faster