BRUSSELS, Sept 15 (Reuters) - The European Union launched new import tariffs against Chinese-made tiles on Thursday to protect EU producers from significant price undercutting by exporters in China.

Chinese exporters of bathroom, kitchen and paving tiles will face anti-dumping duties ranging from 26.3 percent to 69.7 percent at European borders, in a move that the EU says will counteract the harmful impact of illegal Chinese price dumping.

"The effects of the imposition of measures can be expected to assist the Union industry, with (a) reduction of the threat of closures and reductions in employment," the EU said in its official register.

Duties will stay in place for five years, and producers may ask for an extension of the measures beyond 2016.

The 27-state bloc uses about one billion square metres of floor and wall tiles every year -- almost enough to cover Greater London. About 7 percent of these are sourced from China.

Europe is the world's second-biggest ceramic tiles producer after China, and exports 25 percent of its production with its market share rising abroad, according to industry figures.

But producers -- largely based in Italy, Spain and Germany and running small operations -- say a price war with China has squeezed profit margins to 0.28 percent in 2009 from almost 7 percent in 2005.

"The introduction of duties serves to re-establish a fair level of competition so that EU ceramic tile producers can continue to compete in Europe, at least as much as they successfully do on export markets," said Alfonso Panzani, president of the European Tile Manufacturers' Association which complained in 2010, triggering an investigation and then duties.

Yet it is uncertain that duties will boost profits for European producers, as importers may turn to Turkey or Indonesia for cheap tiles.