The Trump administration announced on August 18 the addition of 407 product categories to the list of "derivative" steel and aluminum products covered by Section 232 of the US Trade Expansion Act, imposing a 50% tariff on electric-assisted bicycles (e-bikes). But Merida, a major Taiwan-based bicycle manufacturer, said the impact on its exports from this tariff expansion is relatively limited.
Merida stated that most of its e-bike models primarily use carbon fiber or aluminum materials. It explained that although Section 232 now covers e-bikes, the tariffs mainly affect steel used in electric vehicles (EVs). Since Merida's e-bike frames predominantly consist of carbon fiber or aluminum with only a small proportion of steel, the cost pressure is not as severe as some might expect.
Demand for e-bikes remains strong in European and American markets. In Europe, where cycling is heavily relied upon for commuting, demand for electric city bikes (e-city bikes) continues to rise significantly. The growth rate for electric mountain bikes (e-MTBs) is comparable to that of e-city bikes.
Currently, Taiwanese e-bikes exported to the US are subject to a 20% reciprocal tariff, which does not place them at a significant disadvantage compared to major competitors such as Vietnam (20%) and Cambodia (19%). Although China is a major bicycle producer, its tariff rates may exceed 20%, so there has been no notable order diversion pressure yet. Japan and South Korea have lower tariffs at 15%, but their bicycle exports remain limited. The tariffs have minimal impact on Taiwanese manufacturers.
Regarding revenue structure, the US market contributes modestly to Merida's overall sales. It accounted for about 11% of total revenue in 2024 and is expected to increase to 14-15% in 2025 due to declines in the Chinese market. But the US market will remain a secondary source of income.
Merida noted that since Donald Trump's first presidential term, the US has adopted tariff stacking. While some countries have recently been granted tariff caps, the overall environment affects global players similarly.
Currency exchange losses
Currency exchange rates present another challenge. Merida noted that the New Taiwan dollar has rapidly appreciated since May. With export orders priced in US dollars, currency conversion compressed second-quarter 2025 revenue and gross margin, causing an exchange loss of approximately NT$530 million (US$17.35 million). However, recent stabilization of the exchange rates, combined with gradual price adjustments on finished products, should mitigate further adverse effects.
Merida's revenue for the second quarter of 2025 was NT$7.005 billion, down 7.44% from NT$7.568 billion in the first quarter and declining 24.87% year-over-year from NT$9.323 billion in the second quarter of 2024. Cumulative revenue for the first seven months of 2025 reached NT$17.067 billion, a 7.23% decrease compared to NT$18.396 billion during the same period in 2024.
In terms of global bicycle industry trends, Merida currently focuses on road bikes and e-MTBs as its two main sales pillars, accounting for 69% of sales in the first seven months of 2025. The e-MTB segment is gradually replacing traditional mountain bikes. The company plans to launch new products progressively and hold a two-week new bike unveiling event in Germany during the second quarter.
Examining individual markets, Merida pointed out that while it once saw a 39% growth in China in 2024, sales there sharply declined by 43% in the first half of 2025. Nevertheless, having learned from European and American market experiences, Merida strictly controlled inventory levels in China in 2024, enabling it to better manage the downturn in demand.
The European market continues to grow steadily, especially in Western and Southern Europe, with expectations that inventories at its subsidiaries will return to normal levels by year-end.
Although the US market performance lags behind Europe, new models launched by Merida's invested companies have been well received, outperforming average market levels and helping those investments return to profitability. Still, Merida acknowledged that the reciprocal tariffs could suppress consumer purchasing power, requiring ongoing monitoring of future impacts.
Article edited by Joseph Tsai
