CANBERRA, Australia (BRAIN) — The notification that specific e-bike imports into Australia must pay a 5 percent surcharge took the nation’s bicycle industry by surprise. And no wonder. The official notification, issued Feb. 14, was buried at the bottom of the last page of a 14-page government document — underneath new tariff considerations for tools used in the slaughter of goats.
Most of the nation’s bicycle industry only learned about the additional tariff Monday in an article posted by Australia’s cyclingtips.com.
The tariff will mean a price increase on e-bikes made in Taiwan, Europe and India. Countries with existing free-trade agreements with Australia — China, Cambodia, Indonesia and the U.S. — would be exempt from the additional tax.
An unknown company has also filed a request to slap the 5 percent tariff on regular bicycle imports, including frames and framesets, but it has yet to take effect. If the government approves that request, it will have an additional impact on pricing on regular bikes made primarily in Taiwan.
Larry Pizzi, president of Raleigh Electric, said the surcharge was a surprise, but he predicts it will have little impact on the sale of Haibikes and Yuba e-cargo bikes among dealers. “As far as we can tell it will have little or no impact on sales, at least as far as we can see in the forecast,” Pizzi said.
“I think there’s significant enough demand at the moment and that the increase will be built into the pricing,” he added. Both Haibike and Yuba bikes are built and exported to Australia from Taiwan.
According to documents filed with the Australian Department of Home Affairs, Stealth, a boutique maker of high-wattage e-mountain bikes, sought reinstatement of the tariff in late December 2016. Stealth’s bikes, like its B52, sport a powerful hub motor that will propel it to a top speed of 50 mph. It retails for more than $10,000. The F-37, another e-mountain bike, generates 3,700 watts of power.
Stealth is a relatively small company and sells its bikes in the U.S. through several dealers in California, Utah and Texas. It also sells them online.
Pizzi said that for some manufacturers of Taiwan-made e-bikes it may make sense to transfer production to a free-trade country. “Bikes are moveable and manufacturing moves around,” he said.
Still, for Australian dealers it’s unclear whether the supply chain would “eat” the 5 percent tax or build it into future pricing. The new pricing is retroactive to sales made after Jan. 9.
The government is under no requirement to publicly notify an industry of changes in tariff charges. Bicycle imports have enjoyed a respite from the 5 percent tax since 2001 because there was no significant local manufacturing infrastructure for bicycles or e-bikes.
Peter Bourke of Bicycle Industries Australia told cyclingtips.com, “The industry is disappointed and we believe it’s the wrong decision. We will have to deal with it. It will affect business and it will affect consumers.”
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Author: Lynette Carpiet
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