On Thursday, October 18, Petitioners Bicycle Corporation of America (“BCA”) and Detroit Bikes filed a petition for global safeguards on imports of certain assembled bicycles.

SCOPE OF THE INVESTIGATION

The definition of the imported article subject to this petition is complete bicycles having a Customs Value under $400, without regard to the value of accessories on or imported with the imported article. For purposes of this petition, a complete bicycle includes a fully-assembled unit comprised of all component parts and requiring no additional assembly, fabrication, or finishing operations. Complete bicycles subject to this petition also include bicycles imported in any partially-assembled format with all necessary, dedicated components (with or without pedals) included upon importation; e.g., a knock-down kit.

Complete bicycles subject to this petition may be imported under the following HTSUS subheadings: 8712.00.1510, 8712.00.1520, 8712.00.1550, 8712.00.2500, 8712.00.3500, 8712.00.4400, and 8712.00.4800.

Certain classes of products are specifically excluded from the definition of the imported article, including:

i. Motorized bicycles

These items are distinguishable in terms of physical characteristics because they incorporate an integrated motor as part of the complete bicycle.

ii. Bicycles exclusively for fleet use by bike-sharing services

These items are distinguishable in terms of physical characteristics because they include permanently integrated hardware and/or software interfaces that transmit information to a docking station or a mobile app to enable ride-share use.

iii. High-value bicycles

Items of this type have a declared Customs Value per bicycle in excess of $400 per item.

iv. Tricycles, including industrial tricycles; pedicabs; and commercial vending cycles

These items are distinguishable in terms of physical characteristics. Tricycles are three-wheeled cycles. Industrial tricycles, pedicabs, and commercial vending cycles have a load-bearing and load-balanced design, and typically include structural elements that enable transportation of cargo and/or more than one person.

v. Stationary exercise bicycles

These items are distinguishable in terms of physical characteristics and uses. Stationary exercise bicycles are permanently mounted on an immobile base to prevent transport of any kind. These items cannot be used for either on-road or off-road transportation. These items may also include mechanisms to adjust resistance to increase/decrease the level of difficulty required to operate, as well as hardware and/or software interfaces to monitor output and/or connect to a user interface. These items are used primarily for indoor fitness conditioning and/or physical therapy applications.

With the exception of the above-specified excluded items, the imported articles subject to this petition include all sizes, styles, and configurations of bicycles.

PETITIONERS

Detroit Bikes

13639 Elmira St.

Detroit, MI 48227

 

Bicycle Corporation of America

1000 Bicycle Way

Manning, SC 29102

COUNSEL FOR PETITIONERS

Kelsey M. Rule, Esq.

THE RULE LAW FIRM PLLC

1717 K Street NW

Suite 900

Washington, D.C. 20006

PROPOSED REMEDY

  1. A tariff-rate quota (“TRQ”) on imports of mass-market bicycles for a period of at least four years, as set forth below:
  Year 1 Year 2 Year 3 Year 4
In-quota tariff 11 percent on first 15 million imported units 11 percent on first 14 million imported units 11 percent on first 13 million imported units 11 percent on first 12 million imported units
Out-of-quota tariff 61 percent 61 percent 61 percent 61 percent
  1. A reduction of the de minimis threshold for imported bicycles from $800 to $50 for a period of at least four years.
  2. Duty-free treatment for component parts imported by U.S. producers of mass-market bicycles, upon certification that such components shall be used in the production of such bicycles, for a period of at least four years.

SECTION 201, TRADE ACT OF 1974 (GLOBAL SAFEGUARD INVESTIGATIONS), IMPORT RELIEF FOR DOMESTIC INDUSTRIES

Under section 201, domestic industries seriously injured or threatened with serious injury by increased imports may petition the USITC for import relief. The USITC determines whether an article is being imported in such increased quantities that it is a substantial cause of serious injury, or threat thereof, to the U.S. industry producing an article like or directly competitive with the imported article. If the Commission makes an affirmative determination, it recommends to the President relief that would prevent or remedy the injury and facilitate industry adjustment to import competition. The President makes the final decision whether to provide relief and the amount of relief.

Section 201 does not require a finding of an unfair trade practice, as do the antidumping and countervailing duty laws and section 337 of the Tariff Act of 1930. However, the injury requirement under section 201 is considered to be more difficult than those of the unfair trade statutes. Section 201 requires that the injury or threatened injury be “serious” and that the increased imports must be a “substantial cause” (important and not less than any other cause) of the serious injury or threat of serious injury.

Criteria for import relief under section 201 are based on those in article XIX of the GATT, as further defined in the WTO Agreement on Safeguards. Article XIX of the GATT is sometimes referred to as the escape clause because it permits a country to “escape” temporarily from its obligations under the GATT with respect to a particular product when increased imports of that product are causing or are threatening to cause serious injury to domestic producers. Section 201 provides the legal framework under U.S. law for the President to invoke U.S. rights under article XIX.

Duration: The USITC generally must make its injury finding within 120 days (150 days in more complicated cases) of receipt of the petition, request, resolution, or institution on its own motion and must transmit its report to the President, together with any relief recommendations, within 180 days after receipt of the petition, request, resolution, or institution on its own motion.

Finding: If the USITC finding is affirmative, it must recommend a remedy to the President, who determines what relief, if any, will be imposed. Such relief may be in the form of a tariff increase, quantitative restrictions, or orderly marketing agreements.

Actions by Respondents: Respondents must organize their efforts quickly in order to prepare briefs and prepare witnesses for the ITC hearing, organize an analysis of the proper remedy to be imposed if the ITC finds injury, and determine the most compelling arguments in persuading the President not to impose relief if the ITC ultimately recommends import relief.

CONTACT US

For more information concerning this petition and how it may affect your business, please contact Nithya Nagarajan, Jeffrey Neeley, or Stephen Brophy.