EU May Renew Oldest Duties on China in Silicon-Metal Case

28/05/2015 12:00 - 514 Views

The European Union may renew tariffs on silicon metal from China for another five years to curb competition for EU producers such as Ferroatlantica SL, a step that would prolong trade protection in place for a quarter of a century.

The EU opened an inquiry into whether to re-impose the duties as high as 19 percent meant to punish Chinese exporters such as Datong Jinneng Industrial Silicon Co. for allegedly having sold silicon metal in the EU below cost, a practice known as dumping.

The investigation will determine “the likelihood of continuation or recurrence of dumping and injury” from China, the European Commission, the 28-nation EU’s trade authority in Brussels, said on Thursday in the Official Journal. The anti-dumping duties were due to lapse on May 30 and will now stay in place during the probe, which can last as long as 15 months.

The case of silicon metal, used in the chemical and aluminum industries by companies such as Wacker Chemie AG and Trimet Aluminium AG, highlights how EU trade protection against China can become entrenched. China faces more EU anti-dumping duties than any other country, reflecting European concerns about the Chinese threat to the manufacturing base in Europe.

Of the current EU anti-dumping levies on about 50 kinds of goods from China ranging from solar panels to tableware, the measures on silicon metal have been in place for the longest time along with duties on a hard-metal material known as tungsten carbide, according to the commission’s database on trade cases.

Anti-Dumping Duties

A more prominent case of decades-long European anti-dumping duties against China involves bicycles. The EU has imposed levies on imports of Chinese bikes since 1993.

The EU introduced anti-dumping protection on silicon metal from China in 1990 as a fixed duty per metric ton and re-imposed it in 1997 in the form of an ad valorem duty amounting to 49 percent.

The bloc renewed the levy a second time in 2004 after finding Chinese silicon-metal exporters continued to undercut European producers. When it re-imposed the measure a third time in 2010, the EU also cut the rate to 16.3 percent for Datong Jinneng Industrial Silicon and to 19 percent for all other Chinese silicon-metal exporters to ease the impact on European users.

The threat to renew the current anti-dumping duties stems from a Feb. 27 request by lobby group Euroalliages on behalf of companies representing more than 25 percent of EU production of silicon metal, according to the commission, which listed Ferropem and RW Silicium GmbH as other European manufacturers.

Source: Bloomberg