Proposed New Section 301 Tariffs Could Hurt Electric Scooter Startups, Flexport Says
Among the newest list of proposed HTS subheadings to be subject to 25 percent Section 301 tariffs (see 1806210029) are electric scooters, a product that's helped fuel rapid growth of short-term scooter rental companies in the U.S., Flexport noted in a June 21 blog post. Import data for the last year shows "goods qualifying as 8711.60.00 added up to nearly $670 million worth of scooters brought into the U.S.," Flexport's communications director Parker Ward said. "Had these 25% tariffs been in place during the same time period, this would have added an additional $170MM in supply chain costs for scooter importers."
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The top six scooter companies in the U.S., which include Bird, LimeBike and Uber's Jump, have raised $700 million in funding, Ward said. "While we don’t know what percentage of that funding goes directly into hardware, it’s safe to say that a 25% cost spike will have a major impact on their operating costs." The largest companies will likely have the "most flexibility in sourcing manufacturers," while "tariffs could shorten the runway for the smaller companies and put more severe pressure on their operating costs." The companies can still lobby for product exclusions, but "one thing’s for sure: when your business depends on racing to assemble the largest network of vehicles, a tax on the vehicles themselves is a major speed bump."