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Intensifying U.S.-China Tensions Could Hurt American Bike Supply

MICHEL MARTIN, HOST:

We're going to turn our attention back to the U.S. and China for a moment. Trade between the two countries is enormous. But President Trump has said he is considering retaliating against China via trade for what he considers an unacceptable response to the coronavirus pandemic. As we've been discussing, the two countries are already in conflict over trade. And as it was heating up last year, we spoke with Morgan Lommele. She's the director of state and local policy at People For Bikes. That's a bike industry coalition. The bicycle industry imports more than 90% of bikes and bike parts from China. And before getting into what a possible trade war with China could mean for business, she told us how the coronavirus pandemic has affected bike sales.

MORGAN LOMMELE: We've been serving our members. And we're seeing families, individuals riding bikes in droves more than we've seen over the last 20 years. So by number of measures, bicycle-riding is up about 50% from the same period of time last year. And there's a direct link to the pandemic in understanding why people are riding bikes more often.

MARTIN: So this is interesting. So a lot of retailers are just being crushed by this. Are you saying that it's actually the opposite for the bicycle industry, that, actually, the demand is such that the stores are doing pretty well?

LOMMELE: Stores are doing really well. And store owners who've I've spoken to over the past couple months are almost sheepish in admitting that because they understand it's a pandemic. They understand that folks are staying home, and we need to be sensitive to the environment. But they are having a really hard time keeping up with demand for service. So there's this environment where, sure, shops are seeing record-level sales, record-level demand for service. But their employees are either staying at home or on restricted schedules. A lot of states do have measures in place that restrict the way bicycle retailers can operate to keep everyone safe, and we're not seeing that level off. We're seeing a mini-bike boom that's unprecedented and really trying to work with retailers and suppliers to understand how to keep bikes in stores and how to keep people bike-riding.

MARTIN: You know, earlier this week, as you heard, you know, President Trump suggested that he is very angry at China. And he suggested that he might use trade relations, you know, once again as an expression of his anger, you know, with China. So without debating, you know, the merits of that, he suggested that he might, you know, once again get involved in the trade relationship. What would that mean for your industry?

LOMMELE: Well, for - our industry has seen the additional trades on e-bikes, kids' bikes, road bikes, single-speed bikes, helmets, headlights, tail lights, a lot of the products that are core to bicycle riders and keeping them safe - we've seen exclusions on those items. So what that means is the additional tariffs were pulled back. Those - a lot of those exclusions expire in August or September. And the reason - you know? What the government does and what the USTR does is they grant those exclusions to provide a little bit of leeway for manufacturers to consider sourcing and other places than China. Those exclusions are set to expire pretty soon. And the industry is generally worried that if those exclusions expire, those additional tariffs will be put back on those products. And that will really harm our ability to provide a safe, low-cost product to Americans who want to ride bikes. So that's one of the real implications.

MARTIN: So before we let you go, what are you going to be paying attention to on behalf of the industry as the next couple of weeks and months unfold?

LOMMELE: So a couple things. The supply chain is already compromised because products coming out of China have faced a 10- to 12-week delay. So that puts pressure on bike suppliers who import into the U.S. So what we've done is we asked the federal government to relieve tariffs on products so that it gives U.S. bike manufacturers a little bit more of a cushion to deal with delays in the supply chain and also this increased demand. And we're going to continue to ask for those exclusions to be extended on many of the products that I mentioned so that the products can continue to maintain some kind of profit margin on them and continue to offer kind of a low-cost safe product to people who want to ride bikes.

MARTIN: That was Morgan Lommele, director of state and local policy at People For Bikes. That's a bike industry coalition. Morgan Lommele, thanks so much for talking to us once again.

LOMMELE: Thank you. Transcript provided by NPR, Copyright NPR.