Fearing Inundation, EU Furthers Taxes on Chinese Bicycles
Earlier this Thursday, the European Union (EU) furthered anti-dumping duties on Chinese bicycles that are imported from other countries. The measure has been brought in for European trade unions, bicycle manufacturers, small businesses and cyclists. It imposes duty of 48.5% till 2024.
The duties levied are a result of a detailed investigation that was done by the European Union. It was revealed that if immediate measures are not brought out to restrict them, the manufacturers would inundate the EU market with Chinese bicycles.
As per the government policies, an anti-dumping duty can be defined as a protectionist tariff that the government imposes on foreign imports that are priced below air market value. For added protection, several countries impose stiff duties on products that they think are being thrown into their national market leading to an undercut in the local businesses and markets.
Prior to this, amidst the raging tensions of the US-China trade war, the United States had imposed a 500% import duty on various types of steel imported from China. In 2018, China filed a complaint with the WTO against the unfair trade practices being used by the US.
The recently imposed duties include bicycles imported from Malaysia, Indonesia, Sri Lanka, Tunisia, Cambodia and the Philippines as past investigations have found that Chinese bicycles were coming in these countries only to be re-exported to the EU.
The anti-dumping duties were first imposed in 1993 and have undergone several amendments since then. Conducted last year, the review investigation revealed that if the duties are relaxed, there was a strong possibility of the continuation of dumping and recurrence of injury. It has been reported that every year, the EU bicycle industry produces more than 11 million bicycles across its 22 Member States. Extending employment opportunities, the EU bicycle producers provide 100,000 direct and indirect jobs.
In June 2018, an expiry review was launched by the European Commission, that discussed the anti-dumping measures applicable to imports of bicycles from China. As per this report, “during the review period, the Chinese import prices were substantially below the Union industry’s sales prices despite the anti-dumping measures in force during the period considered. The average selling price of the Union industry in the EU market during the review investigation period was almost double compared with the average import price from China.”
The recent decision by the EU was appreciated by the European Bicycle Manufacturers Association (EBMA). Moreno Fioravanati, the Secretary General of EBMA said, “Without a level playing field, Chinese exporting producers would have flooded the EU market with dumped bicycles and rapidly driven the EU industry out of the market, which already happened in the USA and Japan.”
He added that China’s ever-expanding bicycle and e-bike manufacturing overcapacity is now almost five times larger than the total EU market of approximately 22 million bicycles and e-bikes per year.
The main reason why Chinese exporters are focusing on dumping their overproduction in the EU market is the tariffs imposed by the US on many Chinese products, including bicycles, under Section 301.
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