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Following the Trump administration’s ‘Liberation Day’ trade tariff announcement, BikeBiz spoke with Phillip M Lucas, a European cycling industry expert and brand consultant with 2 decades of experience working for global P&A and bike brands.
Here, Lucas shares his detailed analysis of the potential impact and explores possible opportunities that Trump’s trade tariffs present.
Preface: This piece reflects conditions immediately following the announcement. Given the volatility of trade enforcement and international response, some details may evolve rapidly. Take this as an impression of the situation right after the tariffs launched.
Most posts I’ve seen in the past week focus on what the new U.S. tariffs are—and how much disruption they’ll cause the bike industry. And today, another blanket 10% was announced.
Yes—this is a mess. A disruptive, margin-crunching, strategy-breaking mess. A tariff is simply an import tax—paid not by foreign manufacturers but by U.S. importers, brands, and ultimately consumers themselves (whereas some foreign suppliers may concede margin not to lose valuable customers – that is a voluntary act).
But that’s only part of the story.
What fewer people are asking is: What new realities are being created—and where are the opportunities?
Because for premium brands with domestic flexibility, there may be upside. But for the broader market, the math is blunt: the break-even point for locally assembled bikes to match last week’s pricing now sits above $5,000 retail. The further below that value a bike was, the more likely it is to become more expensive.
These trade tariffs don’t just reshuffle pricing: they might just redefine who bikes are viable for.
In this article, I’m not claiming exact tariff rate or building it necessarily from my bottom-up margin-modeling expertise. This piece is meant as a strategic lens—a vision-casting exercise for how the industry might move in response to this shock.
Will a New Golden Age of U.S. Bike Building Follow?
Let’s get something straight: the idea of a truly “American-made” bike is mostly a myth. Even famous U.S. component brands rely heavily on parts or completed products from Asia —now all subject to very real import taxes.
Yes, you can weld frames domestically; several brands do in Ti and Steel like Moots, Litespeed, Firefly, no22, and more. Yes, you can build an assembly line; a few exist – like Detroit bikes’. And a few carbon layup and baking facilities already exist; Allied and Boyd (whose recent acquisition of a German composite factory tooling seems ripe for ROI now, right?) But the belief that tariffs will suddenly kickstart a renaissance of affordable and mass-produced U.S.-bikes? Not without consequences. And for most consumers, those consequences will be visible on price tags.
Scaling local assembly isn’t just about margins:
- Skilled labor is rare—and training takes time
- Quality control gets harder the faster you scale
- Setting up a line costs real money: tooling, ERP systems, layout, flow
For brands considering U.S. assembly, the fixed costs of tooling, training, and ERP integration mean that viability depends on volume—and timeline. Without trade tariff certainty beyond 2025, and the possibility these tariffs may be previously observed posturing techniques of the administration that may soon swing wildly, the payback window remains risky.
Which is why small to mid-sized brands who are already tooled up may now have a first-mover advantage. What were once image and philosophy-driven cost centres might suddenly look like smart hedges against disruption.
But even calculating with modest U.S. labor costs, the cost of tariffed parts makes this a limited opportunity. Below $5K, quick mathematics just doesn’t support local builds.
Let’s Run Some Numbers
(Yes, my calculations here are intentionally simple—it doesn’t model brand or retail margin sacrifices or tariff volatility, nor possible logistical consequences, nor availability vs cost considerations. It is done top-down and not bottom-up… But what I am to generate here is an indicator, and the signal is clear.)
A realistic blended parts sourcing model (to which the new April 5/25 10% additional must be added):
- 40% from Taiwan (32% tariff)
- 30% from Malaysia (24%)
- 10% from Japan (24%)
- 20% from the EU (20%)
➡️ Blended parts tariff: ~23.6% + 10% = 33.6%
(Note: This figure will be far worse from brands whose frames come from mainland China…)
Add U.S. assembly labor—realistically marked up through a lean manufacturer 1.3 markup / 23% margin manufacturer and retailer 1.5 markup / 33% margin share on this cost component: → $225 base becomes $438.75 in consumer-facing cost. (I assume all parties will concede margin here to secure ongoing business… if they don’t, the breakeven point will raise further)
Cost Comparison: Fully Assembled vs. U.S. Assembled (Marked-Up Assembly Included)
This comparison calculates the total landed cost of a bicycle under two scenarios: importing it fully assembled, or importing parts and assembling it in the U.S. For the fully assembled case, a 47.5% tariff is applied to the base cost (which excludes the original 5.5% duty). For the U.S. assembly case, a blended parts tariff of 33.6% is applied to the same base, and a $225 assembly cost is added. The import parts are likely to be priced below the bike, but increased operations costs of sourcing multiple shipments of parts instead of one bike will probably swallow that up, so the two starting points are at the same value. The US assembly cost is also factored in, which is worth $438.75at retail.
A High Breakeven Point for Onshoring
- At $1,000, U.S. assembly is a clear loss. These bikes will see significant price increases.
- At $2,500, the value proposition is still very slightly worse than importing. Expect retail hikes no matter what the provenance.
- At $5,000, local assembly now delivers a modest advantage—but only for those already tooled up and operating efficiently – and with sufficient capacity.
- At $10,000, the math clearly favors U.S. assembly. It offers margin protection, strategic flexibility, and possibly a communications win for high-end brands
Bottom line? The break-even point for cost-competitive local assembly remains somewhere just above $3,000, but those bike’s margins are so lean they are unlikely to be assembled locally. The real case for local assembly starts at about $5000. Just a strategy shift won’t address this. If these tariffs stick, they’ll be a paradigm-changing event that may lead to a notable degree of market contraction. Price-sensitive consumers will likely shift to used bikes or defer purchases entirely—compressing the mainstream market and inflating the resale segment.
Sub-$5,000 customers will feel it first. The $999 recreational bike? Likely to land closer to 1300 imported, or $1,637 US assembled – and this is a very price-sensitive consumer category already. The $2,500 enthusiast bike? Roughly $3300 imported or US assembled. Ouch, even when this consumer price strata seems quite driven. This hits both entry-level segments hard.
If you’re sitting on a landed inventory of sub-$2,500 bikes, consider stopping discounting immediately. Also, consider holding discounts on foreign-assembled bikes up to $5,000: The reason being, I believe it is doubtful there is enough US domestic assembly capacity to allow that segment to benefit from the mild benefit it could attain if done domestically. If your landed cost was pre-april and the MSRP still sits under $5000, you might be holding gold. Yes, what looked like risky old stock last month may suddenly be a strategic price-point advantage—probably now even more valuable than clearing warehouse space. That value could now appreciate, not depreciate, in this unpredictable new taxation environment. (Did you notice how the post-COVID crash delayed many innovation launches? This will do the same again, so with notable price step-up as of MY26, MY25 and previous ageing may become less relevant).
Side note to consumers – perhaps today – even yesterday – is the best time to buy a discounted bike below $5000. As you read above, today’s discounted pricing may not last long. Nor may financing options, if you tend to finance your purchases vs buying cash.
Furthermore, retailers without exclusive brand deals may consider shifting shelf and floor space toward locally parts-assembled brands. This may create a shelf war between nimble vs. legacy players. Shops would also be well served to recalibrate—and boost—their second-hand sales operations. Otherwise, many may stand to lose the bulk of their volume customers – unless pricing power is found somewhere else in the chain. That, or a huge a perceived value boost for bikes must come (more about that below).
Are There Tailwinds Anywhere?
Frame & Parts Tariffs at a Glance (remember, add10%!):
- China: 90%
- Taiwan: 43%
- Cambodia: 60%
- Vietnam: 57%
- EU (Frames): 23.9%
U.S. brands that moved to Vietnam post-301 tariffs are now facing up to 56% tariffs. It’s still better than China, sure—but not good enough to preserve pricing at volume.
However, a clear relative winner in tariffs has suddenly emerged. Europe? Just Imagine: Campagnolo might become a relatively affordable groupset option. Wait, what? And that is not all that Europe might stand to gain from this upheaval.
Whatever happens, if they stick, these tarriffs will accelerate a rebalancing of sourcing away from East Asia—toward Mexico, India, and Eastern Europe—if new supply chains can meet quality and scale expectations
Europe’s Quiet Repositioning
While the U.S. grapples with abrupt cost spikes, Europe may be positioned to benefit quietly—but meaningfully. Here’s what’s changed:
- European frames and parts are now less taxed than many Asian sources. EU-built bike parts now face a 33.9% tariff vs a 43% tariff from Taiwan. This turns the tables, as before these moves Taiwan had 0% and the EU 4-10%.
- There’s already industrial momentum in play, thanks to the EU Cycling Declaration
- Even though Assembled bikes now face a 46% tariff from the EU vs 43% from Taiwan (a small slip, as the used to both be 11%), the new contrast to China is staggering with its 100% levy. Multiple idle or underused EU bike assembly facilities could be scaled up (Portugal, France, Poland, Germany, etc, etc.) if European companies swallow the 3% and leverage their advantage vs China.
- The opportunity to cut deals: If the EU does a better job negotiating with the administration’s tendency toward liking sharp deals made quicker than Taiwan, Vietnam and such… this near-parity could quickly develop into a new import duty advantage. For both bikes, as well as the current situation for parts.
Even at near duty-parity, opportunity may exist. It is certain the powerful German auto lobby will want to renegotiate beneficial terms, so that may boost the probability of a deal. At least 2 locations on idle belonging to Accell or Pon could be revived with short lead times if demand returns. And if Starmer makes a deal with Trump, the UK’s Brompton could achieve new pricing headway vs Asian competition, too. Perhaps factories in Europe might now gain the window to move into the (significantly reduced scale) mid-premium recreational bike market in the US?*
Rabbithole: Could Rising Car Prices Still Spark a New Bike Boom?
Here’s a wildcard: Cross-industry tariffs are also expected to push car prices sharply upward in the American marketplace. While this happens, Bikes -which are more affordable to buy and maintain than cars – could become much more compelling. Could that trigger a bike-as-transport resurgence, like we saw in the 1970s oil crisis? Sure, the 70’s was because the consumable (fuel) became unaffordable. But a slow-burn transition to lighter mobility is conceivable when heavy vehicles become unattainable.
Maybe. It’s early. If you remember, bike prices shot up in this historic 70’s example – due to an explosion of demand (an opposing cause to today’s). And yet, demand at that higher price was overwhelming – to the point that bike brands were chartering 707’s packed from the floor to ceiling with bikes to fulfil demand. Just as COVID brought a surge in cycling consumption when many feared it would crater – this new economic environment might well work to cycling’s seemingly daunting near-term future in the USA.
A Market Reset Is Coming
Unless the U.S. administration walks this back—quickly—this is more than a temporary disruption. It’s likely to set a new strategic baseline for the next 3+ years.
Larger brands will adapt—but slowly. Expect streamlining and risk avoidance, not rapid investment and sudden pivots. If these tariffs remain for only 12–18 months, many brands may stall and simply tighten their belts. But if they extend through multiple fiscal years, it will trigger genuine sourcing diversification—not just price hikes (Unless brands can amortize investment across multiple seasons, new tooling goes from being an opening of new opportunity, to a liability).
That opens a window for smaller, more agile, premium-positioned brands to move faster. And perhaps, to a certain extent, Trek if they can fire up the Wisconsin assembly lines they closed in 2017? In this cycle, being already tooled up might beat being cautious.
All in all, this may not just be a supply chain shift. It could be a full-blown market reset.
We don’t know exactly how this plays out, but we do know this:
Tariffs have redrawn the bike industry. And not everyone will ride through it the same way.
TL;DR
- U.S. tariffs (36–90%) are a pricing shock—not just a supply challenge
- Local assembly is only viable above ~$5,000 retail, but domestic capacity has limits.
- Below $2,500, onshoring is a clear loss and pricing will go up notably
- Small/mid-sized brands already assembling locally may leap ahead
- Europe has industrial tailwinds and idle factories ready to ramp up
- This is not disruptive if it sticks — it will require a complete strategic & market shift
- This wont just impact manufacturers: it will impact shops notably.
