E-Trade Tariffs Everything you want to know about trade tariffs, and a lot you didn’t want to know By Chris Head “Who pays? The bottom line is that you do.” have spent the last four months learning everything there is to know about trade tariffs in the U.S./ Chinese bike manufacturing industry. I did this because I was attempting to acquire funding for an import and distribution business, which has been a lifelong dream of mine since I was 10 years old. The tariffs implemented on bicycle-industry imports from China put this plan on hold for the moment. As of August 2018, all e-bikes from China now carry a 25-percent tariff. All bicycle components carry a 10-percent tariff now, but that will go up to 25 percent January 1, 2019. No investor in their right mind wants to give the U.S. government 25 percent off the top for essentially nothing. WHO PAYS FOR IT? A tariff is a consumer tax put on imports by a government. The goal is to keep domestic manufacturing on an even playing field with cheaper imports. Throughout history they are typically strategically implemented on one product that is at distinct disadvantage. The revolutionary war was in part instigated by tariffs imposed by Britain on imports to the colonies. Who pays? The bottom line is that you do. Here are some numbers: A distributor buys 180 bikes in a 40-foot container. They pay $750 for each bike. That adds up to $135,000. Then add another $3000 in shipping costs from China and customs clearance, so it is now $138,000. The distributor sells that bike to the dealer for $1000. That means $180,000 in gross profit ($42,000 net) on a 40-foot container. After overhead is covered for four weeks to sell those bikes, the bike manufacturing company might net $5000 to $10,000. The dealer then adds 30 to 40 percent, and that bike now costs the consumer $1666 at top margin. Pedego Stretch – Electric Cargo Bike ADDING IT ALL UP Now, let’s add a 25-percent tariff. That $138,000 container will now cost the distributor $183,000 after it lands in a U.S. port. Each bike costs the distributor $1000. He sells it to the distributor for $1333. Add 40 percent and you get a retail price of $2222. So, the tariff costs the consumer $556. I have heard people imply that the Chinese government pays the tariff. This is not true. Some people have suggested that the Chinese manufacturers might split the cost with American companies. I suppose you can ask, but they will say no. China sells products at around 5 to 10 percent above cost of manufacturing. They are reimbursed by the Chinese government through a VAT (Value-Added Tax) refund. This refund can be as much as 17 percent. Chinese manufacturers can’t afford to absorb any part of the tariff. Seventy-five percent of the Chinese government’s income comes from VAT, and I doubt they have any incentive to share any of that with U.S. companies, and I don’t know by what mechanism that would happen. American distributors are running on very thin margins and can’t afford to absorb any of the tariff. Americanbased manufacturers have a little margin to play with, and they could possibly absorb 10 percent or so for a few financial quarters, so they may be able increase the price a little slower, but it will have to increase prices anyway. The only option is to manufacture e-bikes in Taiwan, Vietnam or India. Taiwan production is more expensive (not 25-percent more, but more expensive nonetheless), while Vietnam has a few factories (owned by the Chinese, mind you) but is not ready to make all of the world’s e-bikes. India is a viable option, but India’s quality is not where it needs to be to be competitive with Taiwan, China or Vietnam. All these moves take time, and any of these countries may be the next target for U.S. tariffs under the current administration. FREE-TRADE ZONES Free-trade zones are areas around the U.S. typically located near seaports or airports. A company can import dutyfree goods into a free-trade zone and pay the tariff when the product ships to customers. So, instead of paying $40,000 when the product lands in port, a U.S. manufacturer can pay $1000 when it ships four bikes to a local dealer. This helps cash flow. The real reason that free-trade zones were developed was to help bring assembly back to the U.S. The idea is this: let’s say that bike parts have a 10-percent tariff. If the bike comes in as unassembled parts, then final assembly is done in the free-trade zone, then a manufacturer can opt to pay the lower tariff of 10 percent when the product ships complete. The current issue is that all bike parts carry the 25-percent tariff beginning January 1, 2019, so as of that date, there will be no lower rate to take advantage of. Originally, bicycle parts were going to have a 10-percent tariff, but the cost was raised to 25 percent across the board. This was a missed opportunity for sure. AS FOR THE FUTURE I would love to see more e-bikes made in the USA. Last year, after a few years of good growth, the U.S. e-bike industry grew exponentially with over 70 million in sales, which was double the previous year. The small business owners who opened an e-bike shop will suffer the most. Sales will slow to a creep with increased prices, especially on the lower end of the price spectrum. I don’t know if the e-bike industry as we know it can survive the tariffs, and I don’t know if the tariffs will change the landscape of domestic e-bike production. A likely scenario if the tariffs persist is for the consumer-direct model to grow dramatically. It is a wait-and-see game for now. I think of the old saying my mom used to say: “This too shall pass.” THERE ARE SO MANY WAYS TO GET ELECTRIC BIKE ACTION In print, from the Apple newsstand, or on your Android device, from Google. Available from the Apple Newsstand for reading on your iPad, iPhone or iPod Touch. Subscribe Here For more subscription information contact (800) 767-0345 Got something on your mind? Let us know at hi-torque.com The post E-Trade Tariffs appeared first on Electric Bike Action.
Sideways action from Rotorua.( Photos: 22 )
Into the Engadin for three days on the best trails around St. Moritz.( Photos: 22 )
Dan Atherton shows off an Atherton Bikes one-off.
Spring program incentivizes consumers to go green and get new gear in time for Earth Day TORONTO (March 10, 2019) – In a move to reduce waste and reward participating bicycle riders, Shimano today launched the first-ever cycling shoe recycling program in Canada through a collaboration with international recycling leader, TerraCycle®. The global bicycle component and footwear leader will partner with 70 participating bicycle retailers across the country who will utilize TerraCycle® Zero Waste BoxesTM to collect used shoes from any brand and reward recyclers with an incentive on new Shimano footwear. The program aims to collect thousands of pairs of shoes through its conclusion on April 20, 2019 and equip participating riders with new shoes in time for Earth Day on April 22. This initiative is in line with Shimano’s corporate mission: To promote health and happiness through the enjoyment of nature and the world around us. “While we bring to market cycling shoes across Canada, we need do our part in protecting nature and recycling plays a key part. With this program we’re ensuring that Shimano is also taking products back in the most ecologically way possible,” said Tim Hadfield, General Manager of Shimano Canada. “We’re thrilled to collaborate with TerraCycle® and with our retail partners spanning the entire country to accept shoes even from our competitors as a way of being able to make a difference.” Consumers can participate in this program immediately. On April 21, 2019, all 70 participating bicycle retailers across Canada will be returning the TerraCycle® Zero Waste BoxesTM to TerraCycle®. At that time, TerraCycle® will break down the shoes into reusable raw materials out of the key shoe components: carbon fibre, rubber or nylon outsoles, uppers and buckles. For more information or to find a participating retailer, please visit https://bike.shimano.com/en-US/information/scl-dealer-list-trade-in-shoe.html
The Giant Factory Off-Road team expands for 2019. Check out their full roster and more inside. GIANT FACTORY OFF-ROAD TEAM EXPANDS WITH NEW RIDERS and NEW SPONSORS FOR 2019 With a strong mix of veterans and new faces, plus key new equipment sponsors, the team targets enduro, downhill, XC and gravel races around the world One of the longest running professional teams in off-road bike racing continues to grow and evolve in 2019. This year the Giant Factory Off-Road Team includes 15 riders from six different nations competing in every discipline from downhill to enduro to cross-country and gravel. The 2019 roster has three national champions and a strong mix of veterans and young talent. The team also welcomes some key new equipment sponsors as it continues its mission to develop cutting-edge race bikes and technologies. The biggest changes for 2019 are the return of FOX suspension products including forks and rear shocks, plus new XC and gravel kits from apparel sponsor Cuore. This year’s Giant Factory Off-Road Team is divided into two tiers: six global riders, and nine regional North American riders. The global squad is focused on major international events including UCI World Cup downhill and cross-country races as well as Enduro World Series events. DH and Enduro riders Eight-time Colombian downhill national champion Marcelo Gutierrez leads the World Cup DH squad. Gutierrez is joined by another national champion, Jacob Dickson of Ireland. These two DH riders will focus on World Cups and other major events on their Glory Advanced race bikes. “This year is looking really good,” said Gutierrez, who is already off to a strong start with wins at two major urban DH events in Colombia, the Manizales Urban DH in January and the Devotos de Monserrate in February. “I feel really stoked about the suspension setup and I’ve made a few key changes like having a new trainer and sports psychologist. This year is probably the best I’ve ever felt physically and I’m extremely comfortable on my new downhill bike.” The 21-year-old Dickson was derailed with an early-season injury last year, but he still managed to score his second consecutive elite men’s DH national championship in Ireland and a couple top-10 finishes at Crankworx Whistler events in Canada. “I’m really looking forward to the 2019 season,” Dickson said. “My goals are to be consistently in the top-20 for every World Cup and to enjoy every race.” American Eliot Jackson rounds out the DH squad for 2019. The California-based pro will focus on Crankworx and North American events along with some key World Cup races. The enduro crew gets a boost this year with the signing of Youn Deniaud, a top young talent from France who finished 10th overall in the Enduro World Series last year. Racing as a privateer, the 22-year-old scored several top-10 finishes in his first year on the EWS, earning the “EWS Breakthrough of the Year” award in the world’s premier enduro series. “After my first season racing the Enduro World Series as a privateer, being a part of the Giant team is just awesome,” Deniaud said. “I have the best partners now, and this is a big step for me. I had a great winter training season and I’m ready to race on my new Giant bikes this year.” The enduro squad also sees the return of some familiar faces. Australian Josh Carlson joins Deniaud on the full EWS circuit, while Canadian Mckay Vezina will race a mix of EWS and North American events. Both had to battle through some injuries this in 2018 and are looking forward to a clean slate this year. All the enduro racers will be racing their Reign Advanced bikes with new FOX suspension setups, plus the shorter travel Trance Advanced Pro 29 for select events. The enduro team will also be developing and testing next-generation bikes and gear throughout the season. XC and gravel riders This year also sees an expansion of the team’s XC and endurance squad, led by up-and-coming talents Cameron Wright from Australia and Cole Paton from the U.S. Both will focus on World Cups and other major XC events around the world. They will compete primarily on their XtC Advanced 29 hardtails and Anthem Advanced Pro 29 full-suspension XC bikes, while also helping to develop and test new, next-generation XC race bikes and gear. Wright emerged as one of the sport’s top young talents when he won the XC world championship as a junior in 2017. Last year he swept the Australian national series, winning all six events in the junior category plus the Australian national championship and the Oceania Championship. This year, Wright, who turns 19 in March, steps up the Under-23 category. “The upcoming season is a big one for me as a first year U23 rider,” Wright said. “It’s definitely going to be challenging with my first World Cup season. The goal is to give it my all and be in the top-10. I’m on a new Giant bike with great suspension and the new Shimano XTR group, and really looking forward to representing the team.” Joining Wright in U23 XC action is 21-year-old Paton. The Colorado resident had several podium finishes at North American races last year, and is looking forward to competing at the international level. In addition to the two global XC riders, this year’s team sees an expanded crew of endurance athletes focused on the growing XC marathon and gravel racing scene in North America. Those riders include veteran Carl Decker, who last year captured the Lost Sierra Triple Crown series on the West Coast. Joining Decker on the regional squad are fellow American riders Stephan Davoust, Ryan Steers, Tristan Uhl and Tyler Weyman. In addition, former U.S. road pro Josh Berry, who last year made the switch to gravel racing and scored podium finishes at major events including Dirty Kanza, Gravel Worlds and Grinduro while riding Giant bikes, will be part of the team for select races in 2019. Each of these riders will have a collection of Giant off-road bikes to suit their racing needs including the Revolt Advanced gravel racing bike, which was released midway through the 2018 season. On the technical front, the team welcomes back most of its sponsors from 2018 along with several key new partners for 2019, including FOX suspension products. Team riders will use Shimano drivetrain and brake components, and PRO/Shimano cockpit components. Additional components and gear include Giant WheelSystems, saddles and dropper seatposts, plus the Giant NeosTrack GPS computer. On the apparel side, the team will once again partner with 100% for DH and enduro race kits, eyewear and full-face DH helmets. XC and gravel kits are produced by new partner Cuore, and Giant supplies helmets including the Rail SX, Rev and Pursuit models for XC and gravel, plus footwear including the Charge XC shoe, Line trail/ enduro shoe and the Shuttle DH shoe. You can follow the Giant Factory Off-Road Team all season long at facebook.com/giantfactoryteam. Here is a list of Giant Factory Off-Road Team sponsors for 2019: Suspension forks/shocks: FOX Wheels: Giant Tires: Maxxis Pedals: HT Drivetrain & Brakes: Shimano Bar/Stem: PRO/Shimano Saddle: Giant Seatpost: PRO/Shimano & Giant dropper Cycling shoes: Giant DH/Enduro apparel: 100% XC/gravel apparel: Cuore Cycling Eyewear: 100% Helmet: Giant & 100% (enduro and full-face) Gloves: 100% Grips: ODI Computer: Giant NeosTrack GPS Chain guides: MRP Other: Honey Stinger nutrition, Park Tool, Finish Line lube and cleaning products, Thule racks, Jaybird headphones, GoPro cameras, Stan’s tire sealant About Giant: Giant is the world’s leading brand of high quality bicycles and cycling gear. Since 1972, Giant has combined craftsmanship, technology and innovative design to create the ultimate cycling experience for all riders, casual to competitive. Through its products, people and retail partners, Giant inspires passion for cycling all around the world. For more information, go to giant-bicycles.com.
Riding an ebike has given Jim Brown “freedom moments,” those rare times when he is able to escape the oppression of cancer.( Photos: 22, Comments: 1 )
Finding Freedom Brown’s garage is like stepping into a Kona Museum We walk to the garage to check out Brown’s stash of bikes and as soon as we open the door we’re swallowed by a world of Kona lore. Photos from nearly two decades of Rad Racing teams adorn the walls. Number plates are tacked on top of each other. Kids with big toothy grins stare back at us from faded photographs. On the wall are several Konas—cyclocross and road bikes, mountain bikes and more. In the center of the garage is a gorgeous Triumph cruiser motorcycle. Next to it sits Brown’s dirt bike. Directly in front of the motorbikes is a bike stand hold Brown’s Kona Remote CTRL, and, as he puts it, his new lease on life. Rewinding 25 years, Brown talks about his move from Yakima to the Olympia area. He’d grown up racing bikes and riding motorcycles and quickly fell into the local race scene where he met Dale Knapp. “He was THE man,” Brown recalls fondly. “He could do everything well. He was a working-class dude. Everybody loved him.” Knapp raced for Redline bikes at the time. They began riding and training together. Knapp and fellow racers Pat Bentson, Ryan Iddings, and Susan Torgerson noticed a lack of opportunity for junior racing development and together developed Rad Racing in 1998. Brown wanted to help grow the local junior racing scene and joined their staff in 2000. He pitched Kona as a sponsor to help provide more official support to the program which began a nearly two-decade long relationship between Kona and Rad. What started out as simply a method to get kids to and from races quickly grew into a Kona-based development team, and Jim found his place in the local bike scene. “It was about teaching kids life lessons and using cycling as the means to learn those lessons,” he says. “It was about setting goals, how to deal with adversity and bounce back and be a humble winner… how to take a loss with dignity.” “Jim was very humble and respectful in the world of racing and sponsorship,” Knapp says. “So, he was brilliant at making sure everyone on the team remain humble and respectful too, even if you won every race.” Throughout his tenure as Rad’s manager, the most critical lesson was about attitude. He likened this to a quote by Vikor Frankl. “Everything can be taken from a man but one thing: the last of the human freedoms—to choose one’s attitude in any given set of circumstances, to choose one’s own way.” Those words would become more of a self-fulfilling prophecy than he ever imagined. His formula worked. During his tenure as manager for Rad Racing, Brown’s charges won 23 national championships and 25 of his kids were named to the world championship team for the United States. “What I really learned from my time with Jim on Rad Racing was how to be a driven and independent adult,” remarks Steve Fisher, one of Brown’s former Rad Racers who is now a veteran on the pro road circuit. “The experiences of setting goals and working hard for a given purpose will serve us a well forever. Traveling and competing around the globe at a young age forced us to be mature and to develop the skills needed to thrive as adults.” After 15 years of firefighting and leading the Rad charge, Brown noticed something felt off with his health. He’d been riding throughout the mild 2015 winter when he started to hear a strange noise during physical exertion. Not quite a wheeze or a cough, he brushed it off as a probable allergy. After experiencing a very unusual breathing episode during the Sea Otter Classic, he decided to visit the doctor. After a CT scan showed an abnormality in the back of one of his lungs the doctors wanted to biopsy nodule for further testing but told him cancer was unlikely. Brown remembers the moment he got the call well. “I was driving through Vantage (Washington), three hours away when the phone rang. I could hear it in my pulmonologist’s voice,” he says quietly. The problem with lung cancer is it doesn’t get symptomatic until it’s pretty advanced. “I turned the car around and came straight home.” Brown was told if he didn’t get very aggressive with his treatment that he could only have 3-6 months to live. Brown’s mantra in life is “Hold Fast,” from an old nautical term that encourages perseverance. He kept thinking. Brown spent a few days absorbing the news and didn’t understand initially that there is no cure for this cancer. “Treating this is like playing Wackamole, so we are limiting it systemically instead of sporadically. I’ve had 30 rounds of traditional chemotherapy infusions and have been on oral chemotherapy for 22 months. I will be on some sort of chemotherapy or immunotherapy for the rest of my life.” he says quietly. The way he speaks about his chemo is interesting. He is thoughtful and careful with his words. He talks about his treatment like it’s something very delicate. The Jim Brown of 10 years ago would have felt differently and he’s quick to admit the change he’s seen in himself since his diagnosis. “I was combative at the beginning,” he says. “I’m gonna be Jim Brown and I’m gonna do this,” he states, then softens. Brown’s treatments are harsh for him, physically and emotionally. He’s gained weight. His heartrate is limited and skyrockets easily. His endurance has taken a severe hit. He has swelling and joint pain. “The medications and all of their side effects are uncomfortable to say the least. But, the drugs are killing the cancer, so it’s what we do,” he says. These effects made cycling all but an afterthought for Brown. Shortly after his treatments began, though, a friend suggested he try out an electric bike. Brown scoffed at the notion. “A motorcycle is a motorcycle and a bike is a bike and never the twain shall meet,” he says laughing. I didn’t need to, and I didn’t take the time to understand at first. Why not just ride a regular bike?” When cycling became nearly impossible he figured he had to swallow his pride and give it a shot. Kona sales rep Jimmy James had a spare Remote that he loaned to Brown. The moment he first turned the cranks, everything changed. “Oh my God. This is the greatest thing ever,” he says. “I immediately got in touch with (Kona owner) Jake Heilbron and asked about being an ambassador of Kona’s eBikes. Now I’m riding the Remote CTRL and it is badass!” The Remote CTRL has given Brown “freedom moments,” those rare times when he is able to escape the oppression of cancer. Brown credits the eBike to giving him what he calls, “freedom moments,”—what he calls any time he doesn’t feel imprisoned by his illness. “This bike enables me to do real mountain biking again,” he says. “For my 50th birthday I was able to ride all the way to Capitol Peak in the snow. That was a good birthday present.” Brown’s relationship with cycling has evolved in similar ways that his self-confidence has. He doesn’t take the small days or rides for granted. He knows that his time on a bike is finite. “The fact that I can go out with two of my buddies and that bike puts me in a position where I can spend two hours riding trails and having fun—that’s what cycling is about for me now. This bike is the tool that has brought this joy back into my life!” To find out more about Brown’s Hold Fast foundation, you can check out the site at www.theholdfastproject.org. Article by Lacy Kemp Photos by Riley Seebeck THERE ARE SO MANY WAYS TO GET ELECTRIC BIKE ACTION In print, from the Apple newsstand, or on your Android device, from Google. Available from the Apple Newsstand for reading on your iPad, iPhone or iPod Touch. Subscribe Here For more subscription information contact (800) 767-0345 Got something on your mind? Let us know at hi-torque.com The post Finding Freedom: The Jim Brown Story appeared first on Electric Bike Action.