Is the golden age of free global trade coming to an end? As the United States are likely to resort to punitive measures in trade conflicts under a returning President Trump, the EU Commission has decided to extend the trade bloc’s anti-dumping tariffs on e-bikes made in the People’s Republic of China by another five years.
In late 2018, the EU Commission decided to slap made-in-China EPACs (aka e-bikes) with hefty anti-dumping tariffs as in 2019. As a consequence, China’s share of e-bike imports into the EU dropped like a stone as many companies shifted their operations away from the People’s Republic of China and towards regions such as Southeast Asia, Eastern Europe, and Portugal. Since the tariffs were limited to a duration of five years and about to expire, the European Bicycle Manufacturers Association (EBMA) petitioned the EU Commission for an extension of these measures. Seen the current market situation, the overcapacities of many export-oriented industries in China, and Xi Jinping’s insistence on boosting high-quality development in the tech sector, in particular by means of subsidies, the EU Commission has decided to extend its anti-dumping tariffs by another five years.
In doing so, the EU Commission continues to rely on two categories of manufacturers based in China: While companies that have been cooperative and transparent throughout the expiry review are subject to a countervailing duty ranging from 3.9 percent to 17.9 percent, all other companies are subject to an anti-dumping duty ranging from 10.3 percent to 70.1 percent. According to the EU Commission the findings of the expiry review showed that e-bike producers in China continued to benefit from unfair subsidies and that imports into the EU were made at dumped prices. In order to safeguard the approximately 12,000 jobs that the electric bicycle industry is estimated to offer in Europe and its related investments, the decision was taken to extend the existing tariffs by another five years.
While this decision unsurprisingly was welcomed by the EBMA, other organizations such as Leva-EU and companies with a significant production footprint in the People’s Republic of China will be critical of the decision taken by the EU Commission. As for the shift in supply chains, the extension by another five years will add to the ongoing dynamic, with new players such as India entering the stage as well. On a side note, the EU Commission is also reviewing the extension of anti-dumping tariffs on conventional bicycles made in the People’s Republic of China, with a decision expected to be taken in a couple of months’ time.