Thank you for the synopsis.
It sounds like uncertainty is more of the problem than the tariff.
just to run it through a little further - What did i miss?
let's say a $1000 bike costs $250 in parts and 100% are subject to the 25% tariff .
worst case is $63 in extra tariff, and let's throw the cost of money in at 10%, so $70
The cost of sale also has a cost of money, another 10% increase, so another $7,
and the cost to sell - assuming the sales people are not on commission, and most people use credit cards
at a 3.5% (high side) of $77+$5 increase in sales tax = $3
so the consumer should see an $85 increase on a $1,000 bike at the 25% tariff rate to maintain margins all the way through.
so 8.5% to the consumer. Worst case. unless wildly wrong on the cost of parts - and i think i'm probably high.
Are the margins are higher on higher-end bikes? Then percentage should be lower.
=====
Al and Fe are traded on the futures market (futures means contracting the obligation to buy it in the future at a specific price, on/by a specific date)
This is different from the spot market - which is the price often quoted. (think bbl of oil, you see the spot price, but the refiners don't pay that,
as they have locked in a price and supply - reducing uncertainty)
Al is down 15% in the last couple months (i just dropped 100lbs off at the local metal scrap, and the price they pay is down 25%)
Fe seems to be up 15% - interesting.
Seems like your math checks out. However, your big assumption is that the actual wholesale cost a theoretical $1000 bike is $250. I doubt that the wholesale cost is that low. Working backwards from $1000, figure bike shops' gross margin is around 30-35% +/- for bikes sold at MSRP (lower on low-end bikes, higher on high-end bikes). Cannondale's parent company, Dorel, typically has gross margins for their Sports group around 22%. Lets assume high end bikes are the shining star of Dorel Sports' portfolio and they build in 35% gross margin. If that's the case, the wholesale cost of a $1000 bike is closer to $500, which means the net effect of the 25% tariff would be much greater than in your example.