Walmart's biggest bike supplier crippled by China tariffs

Kent International CEO Arnold Kamler addressed the roadblocks his 100-year-old company is encountering from the ongoing U.S.-China trade war on FOX Business' “The Claman Countdown.”

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Kamler initially requested tariff waivers back in 2018.

"We were so excited," Kamler said when asked about his initial thoughts for the partial waiver. "We hit the jackpot."

He had hoped the Trump administration would abide by his request, but to his dismay, the waivers only cover 3 percent of the tariffs affecting his company. Bicycle parts are not exempt from the tumultuous trade war.

"But then, we started to dig into it, and we saw it’s only for fixing bicycles, which is just maybe 1%  of our business. And e-bikes are 2% of our business.”

"And so it was better than nothing but [still] very disappointing."

- Arnold Kamler, Kent International CEO

With all the economic unrest in China, companies such as Kent International moved a portion of its international market to Taiwan. Despite this, there hasn’t been smooth sailing for the bicycle company.

"The price was about 12 to 15 percent higher than China, but with the tariffs of 25 percent, we figured it’s a win," Kamler said.

The shift from China to Taiwan came with a steep price tag as well, costing roughly $100,000 in technology, Kamler claimed. Making the calculated decision to change locations was supposed to bring a positive result, but Kamler said the endless costs from the move are adding up.

Kamler wonders if he should’ve taken Trump's advice to leave China in the first place. He said there has been an additional 25% tariff and 11% tariff, which results in an additional $2 million of lost revenue per month.

After all the problems Kamler has faced thus far, he is considering moving his company to Cambodia. He is not sure how rough the waters will be there, but he wants to make the point that the United States is paying the price of tariffs — not China.

Despite this, Kamler is hesitant to tell fellow businessmen to spend tens of millions of dollars for a factory in Cambodia or the Philippines to avoid tariffs on Chinese imports.

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As Walmart’s largest supplier of bicycles, Kamler hopes the uncertainty factors and high costs will level out soon.