Saturday, June 8, 2024

Comparative Advantage: "The US doesn’t make bicycles anymore..."

From The Verge, June 6:

It took 30 years for the US to lose almost its entire bike manufacturing industry. Can the most bike friendly member of Congress fix that? 

Good luck finding a bicycle — an especially an e-bike — made in the US.

It only took 30 years for the US to lose its entire bike manufacturing industry. China dominates global bike manufacturing, with imports accounting for 97 percent of bikes purchased in the US, according to one report. Indeed, China has captured some 86.3 percent of the US bike market. And now tariffs threaten that market.

Congressman Earl Blumenauer sees an opportunity. The 75-year-old Democrat from bike-friendly Portland, Oregon, is introducing a new bill that aims to re-shore domestic bike manufacturing by stealing it back from China while also helping protect electric bikes from high tariffs that could put them out of reach for many Americans. 

His bill includes three different proposals:

  • A 10-year suspension of tariffs on imports of bike components, like frames, wheel rims, hubs, brakes, saddles, and electric motors, to incentivize domestic bike assembly;
  • A transferrable e-bike production tax credit for bikes manufactured in the US to encourage companies to utilize domestic manufacturing; 
  • Low-interest loans, repayable after 12 years, for bike manufacturers to buy production equipment and other capital expenses.

Blumenauer also wants to close the loophole that allows for the import of cheap Chinese e-bikes with safety checks, some of which have been linked to deadly fires caused by faulty batteries. And he is continuing to lobby for his bill to give Americans a $1,500 discount on the purchase of a new electric bike.

And he’s trying to get it all done before he retires at the end of the year, after half-a-century spent in Congress. Its been tough trying to get his deeply polarized colleagues to band together to support, of all things, bikes and cycling. His e-bike rebate program remains stalled. All everyone wants to talk about is electric cars. But Blumenauer, who chairs the Congressional Bike Caucus, sees these efforts as part of the legacy he wants to leave behind....