How Movement on Trade Policy Is Affecting the Bike Industry
By: Noa Banayan, director of federal affairs
An update on PeopleForBikes' federal trade and tariff work.
Last year, PeopleForBikes published our 2021 Trade Policy Agenda, outlining the U.S. bicycle industry’s policy recommendations for Congress and the Biden-Harris administration, and shared it across Washington, D.C. While a majority of our advocacy work focuses on boosting infrastructure funding and increasing access to and for bikes, trade policy holds a lot of influence over the availability of bikes, parts and accessories in the U.S. Now eight months later, here is an evaluation of our work to advance our top goals:
Replace the Section 301 Tariffs With More Targeted Actions
- At the end of 2020, the last remaining pieces of Section 301 tariff relief expired. In practical terms, this meant substantial tariff increases on critical products such as children’s bikes, electric bicycles, helmets, lights and more. Every bicycle product imported from China now faces a Section 301 tariff and most are subject to an extra 25% duty.
- We are actively advocating for Section 301 reform in Congress and there’s momentum on Capitol Hill to address Section 301 tariffs, not only by reforming the process but also creating a new process going forward. In June, the Senate passed the bipartisan Endless Frontiers Act, a massive science, technology and competitiveness bill that included several positive provisions on Section 301, including automatically renewing all expired tariff exclusions for 18 months, providing retroactive recovering of duties for some products that were excluded and creating a new, mandatory exclusion process. This would include all bike products for which duties increased after December 31, 2020. While the House of Representatives has not taken up the mantle to move this or similar legislation, we anticipate it will rise up on their agenda after they tackle infrastructure policy and a budget resolution.
Incentivize U.S. Production
- While President Biden and his administration have touted the benefits and potential of U.S. manufacturing and production, his administration’s actions so far have yet to offer any meaningful incentives for onshoring or supporting existing made-in-the-U.S. operations. At PeopleForBikes, we are continuing to consult the industry on policies we could support to meet the goals of the current administration.
Renew the Generalized System of Preferences
- The Generalized System of Preferences (GSP) provides tariff relief for imported goods from developing nations. The last authorization for GSP expired on December 31, 2020, so the program remains lapsed.
- We have been emphasizing the importance of renewing GSP to our Congressional allies for nearly two years, and there are signs of progress. The Endless Frontiers Act in the Senate also included a renewal of the Generalized System of Preferences through January 1, 2027. The reauthorization would be retroactive to December 21, 2020, allowing importers to recover tariffs on goods from GSP countries that were paid this year. If the bill moves through the House and becomes law, it would reform the GSP to promote human rights, the environment, women’s economic empowerment and other international goals of U.S. trade policy. It would also require the U.S. Trade Representative to review whether GSP countries are complying with these requirements more frequently.
- In the House, Democrats and Republicans are aligning behind two separate bills to renew GSP that differ in specific details.
Work With Congress and Our Trade Allies to Pass a Free-Trade Environmental Goods Agreement
- We continue to promote the concept of a free-trade agreement for goods that promote environmental sustainability and/or health and wellness — for which bikes are well positioned. Lawmakers should make it easier for Americans to purchase products like bicycles, electric bicycles and other bicycle products that help lower carbon emissions and enhance their well-being by facilitating the movement of these goods through an international free-trade agreement. While this issue is unlikely to see near-term movement, we continue to emphasize the importance of this issue to the United States Trade Representative.
Work With Congress to Amend the De Minimis Shipment Rules
- The De Minimis shipment rules provide duty-free treatment for shipments valued at $800 or less. This includes avoidance of Section 301 tariffs. These rules provide a substantial cost advantage to foreign retailers and disadvantage businesses that have a physical presence in the U.S. It also provides an easy avenue for products that don’t comply with required safety standards to reach Americans.
- While De Minimis reform continues to remain elusive, PeopleForBikes continues to press Congress and the United States Trade Representative to support changes to De Minimis shipment rules, namely lowering the threshold for imports and ensuring that American consumers can purchase safety products like helmets that meet rigorous testing regulations.
Pass the Miscellaneous Tariff Bill
- The Miscellaneous Tariff Bill (MTB) provides tariff relief for products that lack a domestic manufacturing base. The most recent MTB, which provided limit relief for bicycle products such as disc brakes, expired at the end of 2020. Led by PeopleForBikes, our industry substantially increased its engagement in the administrative process that determined what products were included in the MTB in 2019 and 2020. This resulted in a significant expansion of products recommended for relief in the next MTB in the 2020 report issued by the U.S. International Trade Commission. We are now awaiting the final step in this process, which requires Congress to pass a bill containing those recommendations.
- The Endless Frontiers Act in the Senate included the 2020 recommendations, which would go into effect until December 31, 2023. It also reauthorized the U.S. International Trade Commission to issue recommendations for two additional cycles of MTB relief, starting in 2022 and 2025. We’ll continue to push the House to pass these recommendations.
Significant progress has been made on key bike industry trade issues in 2021, and we anticipate that several of our priority issues will see successful outcomes. We anticipate that Section 301 reform, GSP renewal and passage of the MTB are questions of when — not if. While the details of Section 301 and GSP remain uncertain, there is significant pressure on Congress and the Biden Administration to act. PeopleForBikes will continue to press our agenda forward with the goal of securing several big wins for the bike industry in 2021.
Looking for a way to help? We need to make sure Congress hears the bike industry’s trade priorities loud and clear. Click on one (or all) of the links below to send a message to your elected officials about some of our key issues: