The European Union extended 20-year-old trade protection against bicycles from China to Indonesia, Malaysia, Sri Lanka and Tunisia, saying Chinese manufacturers used the four countries to evade the levy.

The EU said Chinese exporters of bikes to Europe shipped them via Indonesia, Malaysia and Sri Lanka and arranged assembly operations via Malaysia and Tunisia to dodge the 48.5 percent duty. Separately, the EU lowered the levy to 19.2 percent for one Chinese exporter and to zero for two others including Ideal (Dongguan) Bike Co. while prolonging the anti-dumping protection until mid-2018 from October 2016.

The levy is meant to punish Chinese exporters for selling bicycles in Europe below cost, a practice known as dumping. In October 2011, the EU renewed the anti-dumping duty for five years to help European producers including Accell Group NV (ACCEL) compete with cheaper imports.

The import tax “was circumvented by trans-shipment via Indonesia, Malaysia, Sri Lanka and assembly operations via Malaysia and Tunisia,” the 27-nation bloc said in a decision today in Brussels. The extension, which exempts some Indonesian, Sri Lankan and Tunisian bike manufacturers, results from a probe opened last September and will take effect after being published in the EU’s Official Journal in coming days or weeks.

Bicycle trade is a microcosm of EU-China commercial frictions that are growing as European policymakers threaten a broader crackdown on perceived unfair low pricing by Chinese exporters. The two-decade-long punitive duties on bikes continue to preoccupy the EU and China while the bloc warns of possible new levies on Chinese solar panels and mobile-telecommunications equipment to counter alleged dumping and subsidies.

Bicycle Market

China, the world’s biggest bicycle market with production of 83 million in 2011, threatens European producers because the country exports almost 70 percent of its output and has spare capacity of more than 25 million, the EU said. The EU is also attractive to Chinese exporters because it is the No. 2 bicycle market, according to the bloc, which said China’s share of the European market is about 10 percent when the circumvented imports are included.

European trade protection against Chinese bicycles dates to 1993, when the EU introduced a 30.6 percent anti-dumping duty on imports from China. The bloc renewed that levy in 2000 before raising it to the current 48.5 percent in 2005 at the same time as introducing anti-dumping duties as high as 34.5 percent on imports from Vietnam.

Five-Year Prolongation

The EU let the levies against Vietnam expire in July 2010 while opening an investigation into whether to renew the 48.5 duty against China, a step that automatically kept the measure in place at least for the duration of the probe. The five-year prolongation in October 2011 was the outcome of that inquiry.

Today’s EU decision to ease the 48.5 percent duty for three Chinese bike exporters is the result of a review begun in March 2012 and re-imposes the trade protection for five years from the upcoming date of publication in the Official Journal.

Last week, the EU ended a threat to introduce a separate set of punitive duties on Chinese bikes by closing a probe into alleged subsidies to the Chinese industry.

In a third decision today, the EU renewed anti-dumping duties as high as 63.5 percent on a welding product from China for another five years following a review into whether to let the measures lapse.

These levies apply to tungsten electrodes, used for welding in industries such as aerospace, automobiles, shipbuilding and oil and natural gas. The EU imposed the duties against China in March 2007 to shield Austria’s PlanseeMetall GmbH from cheaper imports.