EU seeking to impose a 5 year duty on Chinese wheels

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From Reuters:

The European Union wants to impose duties of 22.3 percent on imports of Chinese car wheels that could be valid for five years, according to a document seen by Reuters.

The European Commission, the EU’s executive branch, wants duties to defend EU producers against Chinese vehicle wheels made of aluminiun that it says exporters are dumping on the EU market at illegally low prices.

“In the light of the level of the injury caused to the Union industry, it is considered necessary that (a duty) be definitively collected,” the document says.

If approved by a majority of EU governments later this month, duties will likely roil European car makers such as Renault (RENA.PA) and BMW (BMWG.DE), which want access to cheap Chinese car parts. The EU uses about 50 million wheels every year, creating a market worth about 300 million euros.

The duties – which must pass into law by mid-November – are higher than interim duties imposed in May at 20.6 percent and highlight EU concerns that China is making inroads into those high-tech sectors that have so far withstood Asian competition.

They could complicate EU-China relations already strained by current EU challenges on how China prices exports ranging from Internet modems to fibreglass, bicycles and shoes.

China’s Ministry of Commerce denied the dumping charges when EU trade regulators launched the investigation in August 2009, and said the investigation was not in line with World Trade Organisation (WTO) rules.

Last week, China started its first investigation into the legality of European farm subsidies, targeting European potato starch.

Yet EU producers represented by the Association of European Wheel Manufacturers and led by Germany’s Hayes Lemmerz International have worried in the past that the anti-dumping duties may not be high enough to ward off Chinese competition.