The CEO of Guardian Bikes details the challenges an industry whose production has moved almost entirely offshore.
An interesting case study in the challenges facing domestic manufacturers was laid out before a Senate committee today.
In his testimony before the Senate Committee on Small Business & Entrepreneurship, Guardian Bikes Co-Founder & CEO Brian Riley called on the federal government to “prioritize policies that encourage producing goods here at home to satisfy domestic demand first and foremost” with bicycle production serving as just one of many examples of industries that have been almost totally obliterated in the United States in the face of unfairly trade imports.
In the early days of the bicycle industry, more than 99% of bikes sold in America were Made in America, largely in Ohio and Chicago. Many of these bike manufacturers went on to develop some of America’s greatest innovations. (Henry Ford’s first attempt at building a gasoline-powered automobile was a quadricycle, and the Wright Brothers’ bicycle production financed their airplane research.) Then came World War II. As so many American manufacturers did during that time, domestic bicycle component suppliers mobilized for the war effort, switching production to support America’s military.
In the years following the war, “bike tariffs were slashed from 30% to an average of 11%, and by 1955, imports had captured a staggering 40.6% of domestic bicycle sales,” Riley testified. “Various trade enforcement actions helped slow further bleeding over the next few decades, but it was a steady decline. By 1999, the three remaining major U.S. bike manufacturers had shut down all domestic manufacturing, laying off thousands of employees.”
Today, China is the world’s largest bicycle manufacturer, accounting for 76.5% of the U.S. market. But it’s likely got a larger share than that. Industry sources report that China probably supplies the majority of the bicycle parts that are assembled in Cambodia and Vietnam, two nations that account for 10.1% and 2% of the U.S. bicycle market, respectively.
U.S. bike manufacturing has had far from an easy ride ahead of it, but Guardian Bikes is leading from the front.
This April, the company announced the launch of the first large-scale bicycle frame manufacturing operation in the United States. The Seymour, Ind., facility will play a key role in the company’s mission to reshore bicycle production and its supply chain. To that end, Guardian Bikes will use domestic steel and aluminum for its frames.
However, “imports from low-wage countries, particularly in Asia, which also benefit from subsidized steel and aluminum” make reshoring all the more difficult, Riley testified. “Over 200 million pounds of overseas steel and 40,000,000 pounds of overseas aluminum are imported into the United States annually in the form of finished bicycles,” he added. “Bicycle manufacturing can come back to America, and serve a critical role in sustaining a healthy and competitive U.S. steel and aluminum industry.”
Riley heralded Section 232 tariffs on steel and aluminum imports as “the most effective tool to safeguard and rebuild vital domestic industries.” He continued:
“Unlike traditional trade agreements, which frequently promise uncertain and elusive access to foreign markets, Section 232 tariffs deliver immediate and enforceable protection for American businesses. We should never compromise on these effective measures in exchange for theoretical export opportunities that rarely translate into real economic benefit. When faced with choosing between solid, enforceable domestic protections and speculative foreign market opportunities, the right decision is always clear: Invest in America.”
But there’s more work to be done. “Now is the moment to strengthen our tariff frameworks, reinforce strategic protections for critical industries, and resist reverting to failed, reciprocal trade agreements that favor uncertain promises over guaranteed domestic growth,” Riley said.