Leading Taiwanese bicycle brands Giant Manufacturing Co (巨大機械) and Merida Industry Co (美利達工業) on Sunday said that they have adopted measures to mitigate the impact of the tariff policies of US President Donald Trump’s administration.
The US announced at the beginning of this month that it would impose a 20 percent tariff on imported goods made in Taiwan, effective on Thursday last week.
The tariff would be added to other pre-existing most-favored-nation duties and industry-specific trade remedy levy, which would bring the overall tariff on Taiwan-made bicycles to between 25.5 percent and 31 percent.
Photo: CNA
However, Giant did not seem too perturbed by the situation, saying that having the new base rate set at 20 percent, which was close to its expectations, would reduce uncertainty and enable Taiwanese exporters to take measures to counter it.
The company is well-positioned to deal with higher US tariffs by adjusting its production and shipments because it has built a global manufacturing base, diversifying its production out of Taiwan to China, Hungary, the Netherlands and Vietnam, Giant said.
Although the US is one of its most important markets, the latest tariffs are likely to have only a limited effect on Giant’s global sales in the short term, the company said.
To deal with the new levy, Giant has suspended any promotional campaigns in the US involving discounts and increased retail prices by 10 percent to absorb the spike in costs, it said.
As the tariffs are likely to boost inflation in the US, the company would closely monitor whether higher product prices would force US consumers to scale back their purchases before adjusting its marketing strategies there, it added.
For Merida, an increase in tariffs amid growing trade protectionism has squeezed exporters’ profits and led to a restructuring of the global supply chain to ease the impact of the tariffs, the company said.
Merida would pursue a flexible global shipment strategy to achieve a balance between the new US tariffs and its bottom line, it said.
The company said the 20 percent tariff had put it at a competitive disadvantage with its competitors in China, Vietnam and elsewhere.
China faces a 30 percent levy and the final figure is subject to change before talks with the US conclude, while Vietnam faces a 20 percent tariff.
For the customers it does have the US, Merida would work with them to determine how to deal with the tariffs and develop strategies to adapt to market changes, it said.
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