EU launches five-year tariff on Chinese car wheels

01/11/2010 12:00 - 443 Views

BRUSSELS, Oct 28 (Reuters) - The European Union has imposed five-year tariffs on Chinese aluminium car wheels it says are being dumped on the EU market, it said on Thursday.

The 22.3 percent duty comes despite fierce political lobbying and opposition from EU car makers who import the wheels. It is higher than a 20.6 percent duty provisionally imposed in May.

The tariffs underline EU determination to face down China over reported subsidies for industrial sectors and limits on exports of increasingly scarce raw materials.

The duty spells some relief for struggling EU producers such as Ronal and Hayes Lemmerz while hitting wheel importers including Daimler (DAIGn.DE), Renault (RENA.PA) and BMW (BMWG.DE).

Car makers estimate the duties will add more than 300 million euros ($414 million) to the cost of wheels bought in the EU every year, squeezing profits already depressed by the global economic downturn.

Last year, EU car makers bought about 35 million aluminium wheels at a cost of about 1.4 billion euros. About 1 million of the wheels came from China.

"Chinese exporters could buy the main raw materials in China at prices well below the world market prices that the European producers have to pay, and this allowed them to undercut the prices of our clients," said Georg Berrisch, partner at law firm Covington & Burling, which represented European aluminium wheel manufacturers.

"We know that many other industries face similar problems."

A Chinese trade official in Brussels declined to comment on the case. EU-China relations have grown increasingly strained in recent months over the value of China's currency and a string of EU investigations into Chinese trade practices.

Thu Oct 28, 2010 11:20am GMT

By Juliane von Reppert-Bismarck

Source: reuters.com