Memorandum of Disapproval of Bill To Amend the Tariff Classification of Lightweight Bicycles.

I AM withholding my approval from H.R. 8938, "To provide a more definitive tariff classification description for lightweight bicycles."

The new tariff classification description for lightweight bicycles would include a description of the frame. By this means, it would double the import duties on certain types of bicycles being imported.

Bicycles are provided for in paragraph 371 of the Tariff Act of 1930 and were originally subject to duty at 30 percent ad valorem. A tariff concession on bicycles was first granted to the United Kingdom in a bilateral trade agreement effective January 1, 1939. Under that agreement the framework of the existing tariff classification based upon diameter of the wheel was established. That classification provided for separate categories of duties: bicycles with or without tires having wheels in diameter over 25 inches; over 19 but not over 25 inches; and not over 19 inches.

That classification and duty treatment were continued following a concession granted by the United States in the General Agreement on Tariffs and Trade effective January 1, 1948, with one exception. The exception provided that the rate of duty on bicycles with or without tires having wheels in diameter over 25 inches and weighing less than 36 pounds complete without accessories and not designed for use with tires having a cross sectional diameter exceeding 1 5/8 inches was to be reduced to $1.25 each but not less than 7 1/2 percent nor more than 15 percent ad valorem. All other classifications were dutiable at specific rates but not less than 15 percent nor more than 30 percent ad valorem.

The present duty on lightweight bicycles is the result of a renegotiation which took place in February 1961. This renegotiation, in effect, re-established an escape clause rate increase which had been invalidated by a previous court decision.

The practical effect of this legislation would be to increase the duty on imported bicycles having a cantilever or curved frame, weighing less than 36 pounds from the present duty of $1.875 each, but not less than 11 1/4 percent nor more than 22 1/2 percent ad valorem to a new rate of $3.75 each, but not less than 221/2 percent nor more than 30 percent ad valorem. I am informed that approximately one-half of current imports of bicycles that are imported under the lightweight classification are those with cantilever or curved frames, and would be subject to this approximate 100 percent increase in duty.

The enactment of this legislation within a short time after the 1961 negotiations and following the opening of new opportunities for trade expansion under the recently approved Trade Expansion Act would hamper our efforts to improve the position of American industry in foreign markets.

Under the Trade Expansion Act, a wider variety of relief is available to assist American firms suffering from imports. Should the American bicycle industry demonstrate the need for this relief, it should be provided.

JOHN F. KENNEDY