The latest round of proposed tariffs from the US government covers a long list of consumer goods commonly imported from China. Everything from fish sticks to fabric is on the list. If you’re having a slow day, you can check out the entire list here. So is your already expensive outdoor gear about to get even pricier? Lets hope not.
I spent 10 years as an engineer in the sporting goods industry, so I have some in depth knowledge on this topic. Whether you like it or not, there’s very good business reason that just about everything is made across the Pacific. Manufacturing in Asia is often two, three, even ten times cheaper than making things stateside. On top of that, the extensive manufacturing infrastructure means sourcing materials is easier and things get made faster. Call it whatever bad names you want, but I’ve seen first hand that the Chinese are pretty darn good at what they do.
All politics and opinion aside, for any business trying to make money the numbers on the balance sheet don’t lie. When your competition is making similar product in China and able to massively undercut you on price, what else are you to do? It’s follow suit or close your doors.
A 10-25% tariff on goods is very unlikely to cause any drastic shifts back to domestic manufacturing. Tax or no tax, it’s still sooo much cheaper to make things abroad. Many of the items on the tariff list are raw materials, so taxing them could even have the opposite effect. In all likelihood, the added cost of imported goods is just going to be passed on to us as consumers in the form of higher prices. When margins are tight to begin with, companies don’t have much of a choice. Even a “small” 10% price increase can compound massively as it’s passed on from manufacturer, to wholesaler, to the retailer, to you.
Outdoor goods are already subject to some pretty heavy taxes, 17 percent on average. Imported hiking boots are taxed at 37.5 percent, backpacks at 17.6 percent, and ski jackets are hit with a 27.7 percent tariff. The outdoor industry as a whole has voiced strong opposition to getting hit even harder.
It appears most of these segments will slip through the latest tariff attack unscathed, but no one is celebrating victory just yet. Items that you may care about on the new 10% tariff list include ski gloves, sports bags, hats, knives, rope, and a huge list of bikes and bike accessories.
The bike industry is in a bit of a slump right now, so this could be a big blow. With small brands like Niner filing for bankruptcy, and huge brands like Cannondale already losing money, things don’t have room to get much worse. European discount and direct to consumer brands like Cube and Canyon are going to gain an even bigger advantage in an already competitive market.
From the standpoint of skis and snowboards, I think we’re pretty safe… for now The majority of skis and boards are made in Europe, with some smaller U.S. based brands, and only a handful coming out of Asia. I was surprised to see “made in the Czech Republic” on a pair of Marker Kingpins I have in my basement, and most ski boots still retain their European heritage. U.S. made brands could feel the pinch depending on where they source their materials from though. For instance, there are no domestic manufacturers of steel ski edges.
Even if these tariffs don’t end up impacting you’re gear budget much, they’re probably going to dig into your wallet elsewhere. There’s a whole lot of items on that list that are going to make everyday purchases just a little bit more expensive. The United States Trade Representative will be accepting public comments and holding a hearing from Aug. 20-23 before finalizing things on Aug. 31. Voice your opinion if you want to be heard!