The EU will levy tariffs from 26 percent to 85 percent on Chinese imports of screws and bolts to the 27 countries of the EU. The law is expected to take effect by February 9 when the final resolution is published in the EUR-Lex, the official Journal of the EU. The decision is based on an enquiry which started in November 2007 that blames Chinese fasteners for violating reasonable price levels and dumping of the same sparking off huge losses to the European competitors.
According to sources, China is preparing to file a petition to the World Trade Organization for the EU to withdraw the decision claiming that the European counterparts in the same trade have not suffered any loss due to their products in the market. However, major European businesses including Italy’s Fontana Luigi SpA opined oversupply of cheap fasteners from China has adversely affected the European manufacturers, thus tried to justify the EU decision on new tariffs.
China is the largest supplier of iron and steel fasteners, and currently it enjoys a market share of 60 percent in the EU. According to the EU data, from a meagre 17 percent in 2004 the Chinese manufacturers were able to increase their share by 27 percent in 2007. Consequently, the EU fastener players had to be satisfied with 17 percent lowering their share from 22 percent during the same period, despite the demand increasing by threefold.
The US, Japan and Taiwan also have a decent share in the EU fastener market. It has been learned that A. Agrati SpA of Italy and Spain’s Celo SA would be exempted from the levies. Both entities are subsidiaries of Chinese companies. In 2007, the five-year tariff to the EU imports of iron or steel fasteners was worth about $746mn. The global economic downturn which affected the Chinese exports the most will push the country to go all out to obtain a reversal on this decision.