September 16, 2005 – The decision is in and the Canadian bike industry is not happy about it. The CITT (Canadian International Trade Tribunal) released its recommendation for bike importation tariffs last week and those affected by the decision are now having their say.
The recommendation by the CITT, which will now be passed along to the Canadian Ministry of Finance, is to apply a 30% tariff on most imported bikes with a freight-on-board value of $225, which according to the CITT translates into a retail price of approximately $400. The tariff would drop to 25% in the second year and 20% in the third before expiring. While the 30% initial tariff is far better than the 48% the Canadian Bicycle Manufacturers Association (CMBA) was asking for, the industry are still very concerned about the effects it may have.
Outdoor Gear Canada president David Bowman issued a statement saying “We believe the CITT’s recommendations are wrong.”
“The imposition of the CITT’s recommended surtax would adversely and substantially affect specialty bicycle retailers across Canada and would discourage participation in cycling by making cycling substantially more expensive for many consumers,” Bowman said.
He said he thinks the FOB value of $225 could translate into a retail cost of $600, making a big difference in the threshold the tariff would be applied on.
The Bicycle Trade Association of Canada (BTAC) has vigorously opposed the recommended tariffs, which came after a lengthy investigation by the CITT.
The association will host an information session on Friday morning, September 16, during the first day of ExpoCycle 2005 being held in Montreal September 16-18. Industry insiders will explain the outcome of the report to retailers and talk about how it might affect the business.
Although the result was bad news for many in the industry, not everyone is disappointed. Raleigh Canada vice president of finance, Ken Morrison, applauded the move. Raleigh was one of the companies that requested the safeguard inquiry and Morrison said the result was a step in the right direction.
“In our view the tribunal recommendation is fair,” Morrison said in The Sports Letter. “Despite anti-dumping duties on imports from China since 1992, there has been a huge increase in low-cost imports from China.”
Although the ministry of finance will have the final say on the tariffs, it typically follows the recommendation of the CITT. We will continue to monitor and report on this situation