Electric bikes have become increasingly popular in the United States over the past decade, offering a convenient and affordable alternative to cars and public transportation. Electric bikes are also popular with recreational riders and those seeking the fun of electric bikes for fitness, as they are more fun to ride than riding with leg power alone, allowing for longer rides.

How tariffs work

Tariffs are domestic taxes on goods entering a country, usually paid by companies importing the goods.

On February 1, the United States said it would impose an additional 10% tariff on all goods imported from China on top of existing tariffs

and eliminate the duty-free policy for small packages worth less than $800. The policy is aimed at China, especially temu and shein.

China dominates the bicycle manufacturing industry. One report estimates that Chinese manufacturing accounts for 86.3% of the U.S. bicycle market and 60% of global bicycle trade, making China the world's largest bicycle production and export center.

The U.S.'s rationale for imposing tariffs is to encourage companies to produce within the United States, thereby promoting economic growth, job protection and increasing tax revenue. However, mold and casting costs are cheaper overseas, and it is cheaper to make prototypes overseas. You can buy a mold for $1,000 in China, while the same mold in the United States may cost $18,000. This high cost difference can only be amortized when you mass-produce American-made frames. "As shown in the figure:

The original basic tariff was 5%, and the bicycle category tariff rate 1 was expressed as 25%. After the additional tariff of 10%, it became 40%.

5%+25%+10%=40%

 

Therefore, the American bicycle industry trade association People For Bikes plans to ask the new government to reduce tariffs on domestically assembled bicycle parts and helmets. "Such targeted relief can benefit companies trying to assemble bicycles in the United States by reducing the cost of key inputs while creating new jobs for Americans. "In addition to tariffs, American importers have other taxes and fees to pay attention to:

 

2. State Sales Tax

Each state has a different sales tax rate for electric bikes, ranging from 0% to over 10%.

Tax-free states: Oregon, Montana, New Hampshire, and Delaware do not levy state sales tax.

High-tax states: California (7.25%) and New York (4%, and may exceed 8% after adding local taxes).

 

3. Local Tax

Some states allow local governments to levy additional taxes on top of state sales taxes.

For example, local taxes in California may bring the total tax rate to over 9%.

 

4. State incentives

Some states offer tax incentives or subsidies to encourage the use of electric bikes:

California: Provides subsidies for the purchase of electric bikes (such as the Clean Vehicle Rebate Project).

Colorado: Provides tax breaks or cash rebates.

New York: Some cities offer purchase subsidies or tax exemptions.

 

5. Other fees

Registration fees: A few states require electric bikes to be registered and charge fees (such as Hawaii).

Green taxes: Some states may impose additional charges on high energy consumption products.

 

6.Tax examples for each state

State	Federal tariff	State sales tax	Local tax (if any)	Other fees or subsidies
California	36%	7.25%	2%+	Provide purchase subsidies
New York	36%	4%	4%+	Some cities provide subsidies
Texas	36%	6.25%	2%+	No special policies
Florida	36%	6%	1.5%+	No special policies
Washington	36%	6.5%	3%+	No special policies
Oregon	36%	0%		No special policies

7. Notes

Tax rate changes: The specific tax rate in 2025 may change due to Sino-US trade relations or state policy adjustments.

Importer responsibilities: Importers need to pay federal tariffs, and sales taxes are borne by the final consumer.

Compliance requirements: E-bikes must comply with federal and state safety standards (such as UL 2849).