Uncertainty rules in bicycle industry because of tariffs, Santa Fe shop owners say

While tariffs against some countries that are part of the supply chain for bikes sold in the U.S. already are resulting in higher prices, many tariffs have been put off until the weeks or months ahead. That has left some bike shop owners and managers unsure about what to expect and how to proceed.

But most of them seem very apprehensive about the near future.

“We haven’t seen the full effect yet. But most brands are imposing a mandatory price increase,” said Christian Farrar of New Mexico Bike N Sport at 504 W. Cordova Road. He said some manufacturers are insisting the increases be presented to customers as a separate charge from the retail price in the form of a 10% tariff charge. Others are simply folding it into the manufacturer’s suggested retail price, he said.

“The cool thing about our shop is, we have a lot of inventory,” he said. “And we just stocked up.”

Newhall said he, like many others in the industry, has been hesitant to stock up on inventory because he doesn’t know if the tariffs actually will be implemented.

“I don’t want to bring anything in that’s overpriced and then, if a 30% or 40% tariff goes away, you’re stuck with it,” he said.

But prices already are going up, Newhall said, adding he has received notices from four manufacturers who are imposing price increases to cover the cost of the tariffs they are facing.

No matter how it plays out, the bicycling industry is likely to be among the businesses hardest hit by tariffs in the country, he said.

“In the bike industry, hardly anything comes from the U.S.,” he said. “Most of it comes from Europe and Asia.”

Not a U.S.-centered industry

Pedro Murga, one of the partners in F1 Cyclery at 1189 Parkway Drive, said none of the bikes his store sells is manufactured in the U.S.

“They’re all made overseas,” he said, gesturing to a model he said already had gone up in price by 20%.

Most bike frames are made largely of carbon fiber, he said, a material that is produced mostly in Asia. And for the sake of efficiency, that means most bikes are built in that part of the world — specifically Taiwan, with many of their accessories coming from such countries as Switzerland, Vietnam or Italy.

“A handful of companies make parts in the U.S.,” Murga said, citing Industry Nine, an Asheville, N.C.-based company as an example.

Most of the parts made domestically are handlebars, grips and seats, Murga said. But other items cannot be sourced in the country.

“There have been no tires and [inner] tubes made here in the time I’ve been in this industry for 32 years,” Newhall said.

That means the stated goal of the tariffs — to give American manufacturers a leg up over foreign competitors — stands no real chance of being met, Newhall said.

“It’s not like someone can wave a magic wand and go, ‘Whoosh, whoosh,’ and there’s a factory,” he said. It would take many years — and an enormous amount of investment — to build up American manufacturing capacity to the point it could meet demand, he said.

Murga said he would love for the tariffs to work and incentivize manufacturers to come to the U.S., but he holds little hope that will happen.

He suggested Trump administration officials confer with manufacturers of bicycle parts to find out what they need to be successful.

“They need to ask, ‘What do you want us to do to make more bicycles in the U.S.?’ ” he said. “Because there’s a very slim chance they would bring manufacturing here.”

A roller coaster

Tony Farrar, the owner of New Mexico Bike N Sport and father of Christian Farrar, said the bicycle industry already has been roiled simply by the threat of tariffs.

“It’s definitely beginning to affect our industry,” he said. “It’s been a roller coaster.”

Most of the tariffs that have affected the industry so far have been small, he said, in the neighborhood of 10%. But Bike N Sport carries one brand of Chinese-manufactured bicycles that already has seen a 40% tariff.

“We haven’t bought any more,” he said. “We had another brand that's very competitive, so we went with them.”

Christian Farrar said Bike N Sport had seen a rush on sales this spring as concern about higher prices prevailed. But Newhall said he was unsure if there was any panic buying going on at his shop.

“It’s hard to say because this is happening as we go into the [spring] season, because we would have a surge anyway,” he said.

Newhall said some of his more politically aware customers seem to understand how the tariffs could drive bike prices higher and may have decided to seize the moment before additional tariffs are imposed.

“And many of my customers have businesses of their own and are going through the same thing,” he said.

Newhall said the lack of clarity about whether additional tariffs will be imposed is frustrating.

“I’m the type of person who would plan things out,” he said. “And no one can plan anything right now.”

Murga said he is trying to avoid the temptation to worry about the future.

“I’ll worry about it when it finally comes in,” he said. “I don’t want to get stressed out about something that doesn’t happen.”

Newhall said his unwillingness to purchase additional stock to prepare for the possibility of new tariffs is going to affect his business even if they are not imposed, given the fact that supply line disruptions are expected to hit in the next few weeks. The cycling industry has long and complicated supply lines that require a great deal of lead time for orders, he said.

“It definitely is going to affect our inventory, even in a month or two, if Trump says, ‘Oh, forget it all,’ ” he said.

“Even if I tried to order it now, there’s some stuff that won’t be here for Christmas,” he said. “Our vendors would have already been shipping us stuff that would have been here for Christmas.”