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16 hours ago
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Source: AFP
Weeks aft Donald Trump's planetary tariff bombshell, Jeff Chen's mill successful Taiwan is arsenic engaged arsenic ever turning retired c and alloy wheels for high-end bicycles bound for US and European markets.
But helium wonders however overmuch longer it volition last.
The US president's archetypal 32 percent tariff connected Taiwan stunned the island's bicycle manufacturers, who were racing to conscionable orders up of the bluish summertime earlier the caller toll was announced.
Some US customers instantly cancelled oregon postponed shipments, lone to reverse their determination erstwhile the hefty tariffs connected Taiwan and galore of America's trading partners were paused for 90 days.
With a planetary 10 percent levy inactive successful spot and nary clarity connected what happens erstwhile the 3 months are up, Taiwanese bicycle companies and US buyers are successful limbo.
"They don't cognize what to do. There's nary clip to respond," said Chen, wide manager of Joy Group, which makes wheels and hubs successful Taichung.
Joy Group, founded by Chen's gramps successful 1971, is 1 of much than 900 companies assembling bicycles oregon making components, including wheels, pedals and frames, mostly successful cardinal Taiwan, the island's manufacturing heartland.
Source: AFP
Some companies person received a surge successful orders arsenic US customers unreserved to import bicycles and components earlier the extremity of the 90-day period.
Others, similar Joy Group, person seen small alteration successful demand, which Chen enactment down to inventory leftover from Covid-19, erstwhile retailers stocked up to conscionable surging request for bicycles.
Chen said US customers had passed connected the 10 percent tariff to consumers, but a 32 percent levy could enactment the brakes connected further orders, with inevitable knock-on effects successful Taiwan.
'Hidden champions'
"If we are getting affected, past the institution would request to deliberation however to chopped down... everybody volition beryllium facing the aforesaid issues," said Chen, whose institution besides has 4 factories successful China.
Source: AFP
Taiwan has agelong been a cardinal subordinate successful the planetary bicycle industry, but it faced an existential situation much than 2 decades agone erstwhile an ascendant China drew galore of the island's manufacturers to its shores.
Rather than effort to vie with China's cheaper, mass-produced two-wheelers, Taiwanese companies collaborated to upgrade their manufacturing techniques and nutrient prime bikes and components for high-end markets, chiefly successful Europe and the United States.
While Taiwan's export measurement has fallen dramatically from astir 10 cardinal successful the 1990s to 1.3 cardinal successful 2024, exacerbated by the pandemic glut, the mean export terms of its bicycles has risen sharply.
A accepted motorcycle was valued astatine US$1,131 past twelvemonth and an e-bike US$1,848, manufacture information and expert reports show.
China, which exported much than 44 cardinal bikes successful 2024, had an mean terms of US$57.
Taiwan bicycle manufacture adept Michelle Hsieh said the island's occurrence successful targeting the high-end marketplace was down to "hidden champions" successful the proviso chain.
Source: AFP
Small and medium-sized companies -- a hallmark of Taiwan's manufacturing assemblage -- were highly specialised and flexible, Hsieh said, making them "indispensable" successful the planetary market.
"They are making things that different people cannot marque truthful they person that competitory advantage," said Hsieh, a sociologist astatine Academia Sinica successful Taipei.
Trump's hopes that higher tariffs volition unit firms to determination their accumulation to the United States were dismissed by Taiwanese and American bicycle manufacturers arsenic fanciful.
'Like a large family'
It would beryllium "nearly impossible" to acceptable up a mill successful the United States successful the adjacent 3 to 5 years, Taiwanese bicycle institution Giant told AFP, citing higher costs, labour challenges and the deficiency of a "bicycle manufacture cluster".
Source: AFP
"Taichung is the implicit centre of the bicycle industry," said Tim Krueger, manufacture seasoned and main enforcement of US-based Esker Cycles, which imports frames and parts from Taiwan for its upland bikes.
"That's wherever the expertise successful the full satellite is connected however to decently manufacture bicycles."
Some motorcycle makers successful Taiwan look acceptable to payment from the 145 percent tariff connected Chinese products successful the abbreviated term, with US customers seeking retired Taiwanese suppliers, Hsieh said.
But Tsai Po-ming of the Cycling & Health Tech Industry R&D Center, which was acceptable up successful 1992 to assistance Taiwan's manufacture go much competitive, said determination could besides beryllium negatives.
Chinese manufacturers mightiness effort to offload their lower-end bikes successful Europe if Trump's tariffs fuelled inflation, Tsai told AFP.
Source: AFP
"Consumers mightiness consciousness that the prices are excessively high, and though our products are mid to high-end successful quality, they mightiness similar to bargain little priced models instead," helium said.
At Pacific Cycles' mill adjacent Taipei, workers assembled fold-up bicycles mostly destined for Europe and Asia.
Source: AFP
While the institution has small nonstop vulnerability to the US market, president Eva Lin said if 1 of its suppliers was wounded by the tariffs, past Pacific Cycles would beryllium affected.
"The implicit manufacture is similar a large family," she said.
"No 1 can flight from the impact."
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Source: AFP
