The European Union stepped up a fight against alleged Chinese subsidies to manufacturers, threatening tariffs on wireless modems from China to help Belgium’s Option NV counter import competition.

The EU opened an inquiry into whether Chinese makers of wireless wide-area networking modems receive trade-distorting government aid. Option is the EU’s sole producer of these so- called WWAN modems.

In April, the EU opened its first probe into alleged subsidies to Chinese industry, threatening duties on imports of paper from China. The new anti-subsidy case increases the likelihood of European levies on Chinese WWAN modems because it is on top of an EU inquiry opened in June into whether China sells them in the 27-nation bloc below cost, a practice known as dumping.

The new investigation will determine whether WWAN modems from China are “being subsidized and whether this subsidization has caused injury to the Union industry,” the European Commission, the bloc’s trade authority in Brussels, said today in the Official Journal. The probe stems from an Aug. 2 complaint by Option, which is also behind the dumping case.

Anti-Dumping Levies

In a related action today, the commission ordered customs authorities to register EU imports of WWAN modems from China for the next nine months so that any duties set as a result of the subsidy probe can be applied retroactively. The commission took the same step when opening the dumping probe.

Under EU practices, the commission can impose provisional anti-subsidy duties for four months and provisional anti-dumping levies for six months. The EU’s national governments -- acting on a commission proposal -- can turn those measures into “definitive” five-year duties at the same or different rates.
The commission has nine months from the start of an investigation to decide on provisional measures. EU governments have 13 months from the beginning of a probe to impose five-year anti-subsidy -- or “countervailing” -- duties and 15 months to impose definitive anti-dumping measures.

Separately today, the commission imposed provisional anti- dumping duties as high as 43.6 percent on glass fiber products from China to help EU producers including a French unit of Owens Corning Inc. and a Dutch subsidiary of PPG Industries Inc. counter cheaper imports. These products result in glass fiber reinforced plastics that are used in industries including automotive, electronics, construction and aerospace, according to the EU.

To contact the reporter on this story: Jonathan Stearns in Brussels at jstearns2@bloomberg.net