MANUFACTURING WON'T RETURN

Detroit Bikes, a bike company founded by Zakary Pashak after he moved in 2011 to Detroit in the state of Michigan, is said to be the only bike frame manufacturer in the United States and one of the few that has an assembly line, which allows him to suffer less from the tariffs.

"It's harder on my competitors. So it's worse for them than it is for me," he told Xinhua.

Pashak's situation is relatively better because his company, unlike most in the U.S. bike industry, does not import completed bikes from China. Although he is not worried about the tariffs on whole bikes now as high as 36 percent, he has to bear extra cost as long as he imports made-in-China parts, including rims, spokes, and tires.

His factory is in the west end of Detroit, the largest city in Michigan and once an industrial hub in the United States. The "Motor City," however, filed for bankruptcy in 2013 due to an over-reliance on manufacturing, poor financial management and a shrinking population.

Thankfully, Detroit, boosted by development within the greater downtown area in recent years, has shown signs of recovery and drawn more entrepreneurs like Pashak. At that time, he was aware that opening a factory was not easy because the business of bike-making had vanished for quite some time in the United States.

"I couldn't find anyone who knew how to make bikes or anyone who could run a production floor. I didn't know how to get any tools," Pashak said.

"So when an industry leaves the country, it's a serious and significant thing. It's very hard to bring it back. And that's what America faces right now," he continued.

Experts have long dismissed claims that extra tariffs would bring back manufacturing jobs in a substantial manner to the United States, where labor and other costs tend to be much higher than in China and other overseas manufacturing hubs.

At the very least, tariffs are not helping create jobs in the U.S. bike industry but only forcing businesses to look for alternative sources, for instance, Cambodia, Pashak said.

BEST SOURCE

Pashak also noted that the U.S. businesses impacted by the trade tensions are seeking ways of walking around the tariffs, but excluding China is not a feasible option.

"I don't think it's possible to completely remove China from the equation. There's too much there. There's also great engineering. Dealing with Chinese factories is a pleasant experience," Pashak said. "We don't see that type of efficiency in the United States."

China, with an expertise in the bike industry, has been the main source of supply for U.S. companies for decades. Cooperation goes far beyond the bike industry.

"I find that the Chinese companies have done an excellent job in making capital investments in automation and new technologies and in finding ways to improve the efficiency and the productivity of the products that they're producing," Margevicius told Xinhua. "It's very hard for us to look at other places and replicating it."

The number of completed bikes that the United States import from China annually has been pretty stable, ranging 14-15 million, accounting for over 90 percent of all bikes imported to the nation, according to Margevicius.

But for the first quarter of this year, there was a decline of 450,000 bikes due to higher costs caused by the first wave of extra tariffs on the product.

Industry watchers have said that there has been an initiative among U.S. bike companies to seek alternative sources in Southeast Asia and relocate their production line as part of a global supply chain re-adjustment plan, while noting the process requires years to complete and is more challenging for mass market brands to begin.

"It would be very difficult for them to transit and move out. And a lot of that just has to do with the sheer volume. There's a broad availability of labor. The manufacturing cluster is located in China," Margevicius explained.

Margevicius, also executive vice president at Specialized Bicycle Components, a large U.S. importer and a brand selling bicycles worldwide, warned that labor and land costs, which are relatively low in Southeast Asia, would go up and even become an issue if bikes businesses go there in a swarm.

"We've had a great success in working in China with our Chinese partners. We operate with them not just as customer suppliers, said Kamler. "We've developed a very close rapport with them."

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