IN BRIEF
Since 24 July 2026 at 0:01 a.m. Eastern time, new US tariffs of 10% and 12.5% have targeted 60 trading partners that account for 99.4% of the imports entering the United States. No product exclusion was granted to bicycles: every major assembly country is affected. Washington is invoking Section 301 of the Trade Act of 1974, the US trade law of 1974; a single ground is cited: forced labour. A mechanism known as “net MFN” does, however, cap the total tariff burden for five economies, including Taiwan and the European Union — relief that the US industry association PeopleForBikes had explicitly called for.
On the night of 23 to 24 July, at 0:01 a.m. exactly, the US customs landscape changed in one go. Two new rates — 10% and 12.5% — target 60 trading partners that account for 99.4% of US imports. The bicycle sector, which had hoped to secure targeted exemptions, is among them: its exclusion requests came to nothing.
Tariffs on bicycles justified by forced labour
The measure relies on Section 301 of the Trade Act of 1974, which allows the executive branch to retaliate against trade practices deemed unreasonable or discriminatory that burden or restrict US commerce. A single ground is cited: the absence of a ban — or the absence of effective enforcement of that ban — on imports of goods produced with forced labour.
These new duties are not being added to a blank slate: they replace a 10% duty imposed under Section 122, which is expiring. Some categories slip through the net — part of the agricultural products, civil aviation, pharmaceuticals, informational materials and humanitarian donations. Bicycles made in Canada or Mexico also escape them, provided they enter duty-free under the USMCA, the free-trade agreement between Canada, the United States and Mexico; those that fail to meet its rules of origin remain taxed at 10%. Products already hit by Section 232 — steel, aluminium, copper — are, for their part, exempt from the new duty: that is the case for steel bicycle chains coming from China. Bicycles, electric bikes and frames, on the other hand, have not been added to the list of derivative products covered by that Section 232.
Who pays what: the map of the rates
The split between the two rates follows a precise criterion: 10% for economies that already ban imports of goods produced with forced labour — even partially — or that have committed to doing so in a trade agreement, 12.5% for all the others. According to the table published by PeopleForBikes, the US bicycle industry association, the 10% rate applies to Cambodia, Canada, the European Union, Indonesia, Malaysia, Mexico, Taiwan and the United Kingdom. The 12.5% rate targets China, Japan, the Philippines, Thailand, Switzerland and Vietnam. In other words, according to PeopleForBikes, every major sourcing country for the bicycle industry is covered; only Canadian and Mexican bikes entering duty-free under the USMCA escape the scheme.
One nuance changes a great deal. For five economies, the duties stack but their total is capped: when the ordinary customs duty (the so-called “MFN” rate, for most-favoured nation) stays below the cap, the new duty only makes up the difference; when it reaches or exceeds the cap, no new duty is added. The cap is 10% for Taiwan and the European Union, and 12.5% for Japan, South Korea and Switzerland. This is what the USTR calls a “net MFN” rate.
One example makes the mechanism concrete. A mountain bike or a children’s bike imported from Taiwan carries an ordinary duty of 11%, above the 10% cap: no new duty is added to it, and the applied rate stays at 11%. But until 23 July, these bikes were also paying the 10% Section 122 surcharge, which did stack on top of the ordinary duty: its expiry therefore lightens the bill by 10 points for this category — a gap that PeopleForBikes puts at “-10%”. For an electric bike from the same country, the ordinary duty was zero: the rate therefore rises to 10%, unchanged from the situation that prevailed immediately beforehand.
Relief the industry had asked for
PeopleForBikes claims credit for that cap: the association says it specifically requested it in its comments to the USTR, the Office of the United States Trade Representative. On the association’s side, the file is handled by Chris Bell, federal policy director, and Matt Moore, legal and policy counsel.
The victory remains a partial one nonetheless: the sector had hoped for bicycle-specific exclusions and did not get any. But the bill is not the same everywhere. On non-electric bikes from Europe and Taiwan, it is falling: the 10% surcharge that used to stack on top of the ordinary duties expires the same night, and the cap now limits the total — a Taiwanese mountain bike goes from 21% to 11%, a road bike from 15.5% to 10%. Electric bikes, for their part, gain nothing: since their ordinary duty was zero, they were already paying 10% under the old surcharge and stay at 10%. It is the distributors sourcing from countries taxed at 12.5% who take the hit: on China, Vietnam or Thailand, the duty is added to the existing ones, where the previous one was only 10%. Cambodia, Indonesia and Malaysia, for their part, stay at 10%.
The scheme is also being challenged from its very first day: on 24 July, a New York spice importer and a Californian watchmaker filed suit at the US Court of International Trade in a class action brought on behalf of all the companies paying these duties, seeking to have them struck down, to have their application barred and to obtain a refund of the sums paid, interest included. PeopleForBikes, for its part, warns that litigation is likely.
