EU extends tariffs on Chinese bicycles, fearing import flood

BRUSSELS (Reuters) - The European Union has extended for a further five years anti-dumping duties on Chinese bicycles, the bloc said in its official journal on Thursday, after concluding that any lifting of measures would lead to a flood of imports.

FILE PHOTO: European Union flags flutter outside the European Commission headquarters, in Brussels, Belgium June 30, 2019. REUTERS/Yves Herman

Imported Chinese bicycles have been subject to anti-dumping duties since 1993, currently with an import tariff of up to 48.5%.

The extended duties are the latest in a series of EU measures against Chinese exports ranging from solar panels to steel, which have sparked strong words from Beijing.

The European Union also decided in January to impose duties of up to 79.3% on imports of Chinese electronic bicycles. Beijing said then that it was “highly concerned” by the move, which it said came despite market opposition, and that it would assess what steps to take.

The measures on regular bicycles have since 2013 also applied to those coming from Indonesia, Malaysia, Sri Lanka and Tunisia and since 2015 to those from Cambodia, Pakistan and the Philippines, albeit with some exemptions. The Commission says these imports are principally of Chinese bikes.

The tariffs do not apply to Taiwan's Giant 9921.TW, the world's largest bicycle manufacturer, which has facilities in Taiwan, China and the Netherlands. The company won a case at the European Court challenging EU anti-dumping duties in 2017.

EU consumers buy around 18 million bicycles per year, with just over 60% supplied by local manufacturers. Chinese imports make up only about 4% of the EU market, although the other countries’ share was about 17%.

However, Chinese producers have spare capacity to make an extra 37 million bicycles, the EU’s official journal said. Bicycles were also identified as a key industry in China’s current five-year plan and its Made in China 2025 initiative.

Chinese officials did not respond immediately to a request for comment on Thursday.

This meant there was a “strong likelihood” Chinese producers would return to selling at artificially low prices and in high volumes if the anti-dumping measures were lifted. The EU also says input costs are distorted by state intervention.

The European Bicycle Manufacturers Association welcomed the extension, saying that without measures Chinese exporters would have driven EU producers out of their own market, as had already happened in the United States and Japan.

The industry in the European Union, made up of more than 900 generally smaller companies, has a turnover of 12 billion euros, employing 100,000 people directly and indirectly, the association said.

Reporting by Philip Blenkinsop; Editing by Hugh Lawson