Any thoughts on probability of 20% USA tariffs on purchases next year?

[Sakizashi]

I am planning to accelerate some planned purchases this week or next. I am not going to stock up on consumables though, as the tech is evolving fast enough that it doesn't matter for most items vs. their lifetime that it doesn't make sense to buy those and stash them for a year or more. (i.e., sitting on a stash of tires and chains beyond having spares on hand isn't worth it).

I don't think we will see immediate action on the blanket tariff front. HTS codes are pretty complicated, and I expect to see a lot of lobbying for special treatment. Tariffs broadly applied will be like a sales tax, i think a very aggressive selective tariff regime designed to favor specific US industries is more likely as they can also be designed to limit the impact to things that effect the perceived cost of living (e.g., food). I also think a blanket tariff on all imported goods, while legally possible via executive order, would likely go to the courts because the courts made up the "major questions doctrine" to kill Biden's student loan forgiveness, and they can expect lawsuits using that same doctrine for any blanket policy unless its a law passed by congress.

If it ends up being more of a piecemeal implementation of tariffs and they do it by codes, I am hoping that it takes a while to get around to bike parts. However, an executive order to close the de minimus limit of $800 / day for imports to be tax-free is likely to happen sooner rather than later. It's already been drafted and considered by the Biden administration. This will affect many of us who buy from places like Aliexpress or sellers shipping from direct China, as we won't find our goods coming through tariff-free. We will find that we will be paying the 25% already imposed on bike part imports—which we are already paying on most parts imported to the US from China for resale at retail. Because this does not require congress to do anything, this is possible as a day 1 type action.

[PLA]

I, for one, am looking forward to support local businesses to Make America Great Again.

[courdacier]

with all due respect, nobody's going to start making $25 12-sp cassettes in the US. that option is just going to disappear, and you'll be paying $100 like before this whole AE thing came into being. whether that's progress or not is up to you to decide.

[bremerradkurier]

with all due respect, nobody's going to start making $25 12-sp cassettes in the US. that option is just going to disappear, and you'll be paying $100 like before this whole AE thing came into being. whether that's progress or not is up to you to decide.

60% tariff on a $25 cassette would only bring up the final price to $40; maybe we'd start seeing low $30 cassettes from Vietnam or Bangladesh.

[patmidd]

We need to separate two separate issues—de minimis exemption and tariffs—as both will be impacted.

De minimis refers to the <$800 exemption on any tariffs for anything shipped directly to you. This exemption is part of how you get cheap stuff overall, but especially from Alixpress. So, this exemption applies to both a frame you buy from CN for $700 as well as an iPhone 15 (which ships directly from China), which currently costs $700. If de minimis goes away, then duties (tariffs) will be owed on both of those items. Further, part of the benefit of de minimis is that there are no additional fees, like a port fee or all the other random stuff, due. Stuff just gets sent directly to you with no inspections, fees, paperwork, or anything else. So the impact of removing this exemption is actually greater than the potential tariff. Aliexpress, temu, etc are fundamentally dependent on this exemption.

If de minimis goes, then your AliExpress purchase is suddenly subject to whatever tariff is in place, and whatever other processing fees would be charged for normal imports.

Tariffs are the second part. Tariffs apply to categories of goods. For instance, if you are a major bike brand, bicycles as a category (HTS Code 8712.00.15) could see a higher rate. The current rate is 11%, so let's assume that increases to 30%. The bike importer would owe that much more on each bike, which would be passed along in the form of higher prices. If you, Chinertown person, want to buy a bike frame, the HTS code is 8714.91.30. The current rate is 3.9%, but that could jump as well.

The rule of thumb for retail prices is that whatever the final sale price is, the manufacturer price is 1/4 of that. So, for a $2000 bicycle I buy at REI, I should assume that the manufacturer's cost is $500. If the tariff goes from 11% to 30%, the effective manufacturer price would increase 19%, or $95. If I apply the 4x rule, then that $2000 bike would suddenly cost $380 more. While this particular example is unlikely to occur exactly as discussed, this exact dynamic is what cranks up prices.

Why do most goods cost 4x the manufacturer's price? Because that includes the price paid for the goods, the shipping-warehousing-handling costs, overhead to run the company (customer service, offices, etc), and profit for whomever is selling the goods.

When you buy direct from CN, you are stripping almost all of those costs out except for shipping. The manufacturer gets a better deal because you paid a higher price and you skip on everything else. Most Chinese factories operate on very little margin, so the prices that you are paying are actually pretty close to what a big brand would get.

For everyone from the USA, the takeaway is that you should care most about the end of de minimis exemptions. The tariffs are important, but the real issue is that de minimis lets you skip the tariff and all the other costs.

Buy stuff now.

[PLA]

with all due respect, nobody's going to start making $25 12-sp cassettes in the US. that option is just going to disappear, and you'll be paying $100 like before this whole AE thing came into being. whether that's progress or not is up to you to decide.

With all due respect, Making America Great Again is more important to me than poor shifting $25 cassettes.

[Macedingle]

With all due respect, Making America Great Again is more important to me than poor shifting $25 cassettes.

I love how these MAGA Trumpers are basically vegans telling you they are vegan.I swear they literally have to tell everyone how they like another man or they explode. So weird that PLA literally made his forum signature about Trump on a carbon fiber forum. This literally is a non political space lmao

[jonathanf2]

I swear they literally have to tell everyone how they like another man or they explode.

What I don't get is how can someone can be pro-tariffs, but then show up to the MAGA group ride with an all-Chinese bike? 

Reminds me of the "straight" guy who has a wife, but still hooks up with men, but denies being gay!