Revitalizing American Bicycle Manufacturing: A Path to Domestic Production

Good luck finding a bicycle — an especially an e-bike — made in the US.

It only took 30 years for the US to lose its entire bike manufacturing industry. China dominates global bike manufacturing, with imports accounting for 97 percent of bikes purchased in the US, according to one report. Indeed, China has captured some 86.3 percent of the US bike market. And now tariffs threaten that market.

Congressman Earl Blumenauer sees an opportunity. The 75-year-old Democrat from bike-friendly Portland, Oregon, is introducing a new bill that aims to re-shore domestic bike manufacturing by stealing it back from China while also helping protect electric bikes from high tariffs that could put them out of reach for many Americans.

His bill includes three different proposals:

And he’s trying to get it all done before he retires at the end of the year, after half-a-century spent in Congress. Its been tough trying to get his deeply polarized colleagues to band together to support, of all things, bikes and cycling. His e-bike rebate program remains stalled. All everyone wants to talk about is electric cars. But Blumenauer, who chairs the Congressional Bike Caucus, sees these efforts as part of the legacy he wants to leave behind.

“This is a chance for a reset,” he said in an interview with The Verge. “People understand bicycles are different.”

He cited the e-bike boom in the wake of the covid-19 pandemic, in which millions of people found freedom from isolation and boredom in the purchase of an e-bike. After enjoying years of popularity in Europe and China, it turned out Americans liked e-bikes too.

It was an added bonus that e-bikes have been linked to fewer car trips, which has the potential to reduce carbon emissions, slash pollution, and minimize climate change. And some cities responded to the popularity of e-bikes by installing bike lanes and building protective infrastructure to help convince people its safe to get out of their cars and on their bikes, and setting up local tax credit and rebate programs to lower prices.

But the country’s trade policies, especially as they relate to China, could end up bringing all that positive momentum to a halt. Last month, the Biden administration announced major new tariffs on Chinese imports, including electric vehicles, batteries, solar cells, and a range of other goods — seeking to prevent China from flooding the market with cheap products that could endanger domestic manufacturers.

E-bikes find themselves caught in the crossfire. The Office of the United States Trade Representative has said that e-bike batteries imported from China would be subject to 25 percent tariffs starting in 2026, up from 7.5 percent. Past exemptions would no longer apply.

But rather than let tariffs kneecap the e-bike industry right as its gaining steam, Blumenauer is proposing a 10-year suspension to let US companies catch up and establish supply chains that circumnavigate countries like China.

“It takes some time,” he said. “You can’t do it overnight.”

That’s where his domestic manufacturing incentives come into play. Blumenauer is proposing a 20 percent tax credit based on the sales price of a bike produced in the US. If a manufacturer sells a domestically produced bike to a retailer for $1,000, they would then receive a $200 tax credit based on that sale. And the credit would be fully transferrable, meaning if a company doesn’t have enough tax liability to use the credit, it could transfer or sell its credits to another company.

Working in concert with the tax credit is a low-interest loan — around 1 percent, repaid after 12 years — to help companies buy the necessary equipment to begin making their bikes in the US. Companies would need to meet certain benchmarks, like paying a prevailing wage and producing a certain number of bikes a year. But Blumenauer sees it as a strong economic incentive that will help a lot of companies build up manufacturing capabilities from nothing.

“There’s a change in mindset and awareness,” he said. “The e-bike is one of those elements giving domestic production a shot, you know, a toehold. I think would make a significant difference.”

It’s a task taller than the tallest tall-bike. The US used to be a bike-manufacturing powerhouse, but those days are long gone. The homegrown players failed to anticipate the popularity of “sports bikes” in the 1960s, allowing foreign imports to quickly dominate the market. First came Taiwan, and then by the 1990s, China rose to prominence. The writing was on the wall.

Today, its one of the most China-dependent industries in the US, but you hardly hear a peep from policymakers. The Biden administration is happy to spend billions of dollars to prop up electric vehicle production, on the pretense of fighting climate change. But the president has failed to extend the same incentivizing hand to bicycles and, more importantly, e-bikes — despite their own climate bonafides.

It’s not hard to see why. The US is a nation steeped in car culture. The advent of the automobile spurred a multi-decade highway building campaign that effectively subsidized the auto industry, gobbling up land, and squeezing out smaller, more economical modes of getting around, including public transportation. And cars have repaid us by wreaking havoc on our environment, our built environment, and our health. Now we’re left to deal with the mess we created.

But bikes — and especially e-bikes — present an opportunity to correct the sins of the past. They won’t fix everything. We also need more walkable cities and sustainable transit options. But bikes will be an important weapon in the fight against car culture and climate change.

Blumenauer’s bill faces an uphill battle: divided Congress, no more common ground, bikes perceived as a niche industry. Plus Blumenauer’s imminent retirement. He’s not convinced he’ll get it done before he leaves, so he’s reaching out to colleagues to see who can carry it over the finish line.

“There is growing awareness of the role that the bicycle plays across the board,” Blumenauer said. “It’s the most efficient form of transportation ever designed. And when we combine this inherent advantage of the bicycle with electrification, modernized and domestic, I think it’ll build the momentum we need.”