21 June 2019
EU Considers Maintaining Anti-dumping Tariffs on Chinese Bicycles for Further Five Years
The European Commission is currently reviewing the tariffs on bicycles manufactured in mainland China. On 11 June 2019, it was reported that the European Commission is considering extending anti-dumping duties on Chinese bicycles for another five years. A final decision is expected in September 2019.
Hong Kong traders may be familiar with EU import duties on Chinese bicycles. Imported Chinese bicycles have been subject to anti-dumping duties since 1993, with current tariffs going up to 48.5%. The European Commission extended anti-dumping measures also to bicycles from Cambodia, Tunisia, Sri Lanka, Indonesia and Pakistan (with some exemptions) in order to prevent circumvention. Bicycle manufacturer Giant successfully applied for individual exemption in 2015.
The tariffs were due to expire last year. On 4 June 2018, the European Commission launched an expiry review of the anti-dumping measures applicable to imports of bicycles from mainland China at the request of the European Bicycle Manufacturers Association (EBMA) on behalf of EU bicycle producers said to be representing more than 45% of the total Union production of bicycles. The Commission is thus reviewing the tariffs imposed on non-motorised bicycles and other cycles (including delivery tricycles, but excluding unicycles).
In the review, the Commission addresses the question of whether such measures are still warranted. According to reports in the specialised press, it appears to have answered this question in the affirmative. The evidence gathered in the course of the investigation appears to suggest that the tariffs need to be maintained.
The Commission’s investigators established that EU consumers buy approximately 18 million bicycles per year. 60% of the demand is covered by local manufacturers. Currently, Chinese imports make up only 4% of the EU market.
However, the investigation is said to have revealed a large spare capacity with respect to Chinese manufacturers. A European Commission “disclosure document”, made available to interested parties, is said to state that the Chinese producers’ spare capacity amounts to 37 million bicycles per year, which is more than twice the size of the EU market.
The EU bicycle market was found to be attractive for Chinese exporters in terms of its size and attainable market prices. Indeed, bicycles constitute a key industry in mainland China’s current five-year plan and the Made in China 2025 initiative.
On that basis, and the alleged fact that Chinese input costs for energy, metal and chemicals are distorted by state intervention, it is apparently felt that there is a “strong likelihood” that any lifting of anti-dumping measures would lead to an immediate increase in manufacturing and a subsequent flood of imports. Already with the measures in place, the Commission is said to have seen an increase of EU imports from mainland China.
EU manufacturers are believed to fear that Chinese producers would return to selling at artificially low prices and in high volumes, putting one of the main ‘green’ technologies in the EU at risk and harming competition. EBMA has highlighted that the bicycle and e-bike sector directly and indirectly provides employment for more than 100,000 people, making it one of the largest employers in the ’green’ sector. According to EBMA, bicycles form a strategic innovative industry for Europe’s green future, and the EU bicycles, e-bikes and components industry generates over €1 billion annually in EU investments and approximately €12 billion growth in industrial output.
On a similar note, EBMA has welcomed the European Commission’s recent trade defence measures imposed on e-bikes. The definitive anti-dumping duties on imports of Chinese electric bicycles stretch to over 70% and began applying in January this year.
The European Commission disclosed its findings to interested parties who can provide comments until 2 July 2019. European trade unions, bicycle manufacturers, retailers and cyclists are in support of the anti-dumping measures. The European Cyclists’ Federation, a consumer organisation, argued that the anti-dumping measures are necessary to ensure the availability of high-quality bicycles. The European Cyclists’ Federation feared that without the measures, non-EU sources such as Bangladesh, Tunisia, Taiwan, India, Vietnam and Turkey would be hindered from supplying bicycles to the EU market.
The final decision of the European Commission on tariffs is expected in early September.