In the latest twist in the ongoing saga of Trump’s trade war with China, US Customs and Border Protection has excluded imported Chinese electric bicycles from the 25% tariffs originally imposed by the Trump Administration. But the way they did it comes as a bit of a surprise.
The Trump Administration had previously granted an exclusion to the Section 301 tariffs for electric motorcycles of 1 kW of less, imported to the US from China.
Electric motorcycles and electric bicycles actually share the same import code in the Harmonized Import System, as they are both electrically powered two-wheelers.
But while electric motorcycles had been specifically named in the tariff exclusion, no mention was made of electric bicycles.
For clarity, Kent International and Allco Manufacturing requested a ruling on whether the electric motorcycle tariff exclusion applied to electric bicycles as well, according to Bicycle Retailer.
Last month, Customs made a ruling on the case, confirming that electric bicycles are in fact electric motorcycles, at least for importation purposes.
According to Steven Mack, the director of Customs’ National Commodity Specialist Division, in his ruling on the request for clarity:
The product description specifically described ‘motorcycles’ with electric power less than or equal to 1,000 Watts. You state the subject bicycles meet the power rating limitation and should be covered within the scope of the term ‘motorcycles.’ This office concurs.
Interestingly, Mack explained that the decision was made after his office consulted Automotivedictionary.org and Motorera.com, using those resources to determine that e-bikes did in fact fit their definitions of motorcycles.
The immediate result is that electric bicycles imported to the US from China will no longer be subject to 25% tariffs for the length of the exclusion, which expires in August 2020. The exclusion was originally granted to give importers more time to find an alternative solution and hopefully help encourage them to use that extra time to shift production to the US.
But as we have previously covered, major US e-bike importers have agreed that that’s not happening. While there are some companies that produce their electric bicycles in the US, they are a small minority of the market. The vast majority of electric bicycles sold in the US are still imported from China.
Electric Bike Co. is one of a select few US e-bike manufacturers
Adding one more wrinkle to the US/China trade war saga, Donald Trump just signed phase one of a trade agreement with China — the first step toward easing of tensions and tariffs. However, the agreement doesn’t yet begin to reduce tariffs on imported Chinese products such as electric bicycles.
What do you think of the US Customs and Border Patrol’s ruling regarding tariff exclusions for e-bikes? Will this move help encourage local e-bike production? Let us hear your thoughts in the comments below.
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