EU opens "astronomical" tariff ceramics face reshuffle

On March 17th, local time, the EU's anti-dumping case against China Ceramics announced the preliminary results, and cast a “heavy weight” on Chinese ceramics companies. The preliminary results show that none of the Chinese companies obtained market economy status, three Chinese ceramics companies received case processing, and most of the rest of the companies were subject to a 73% high tax rate. According to the EU's anti-dumping regulations, temporary customs duties will be implemented from March 18, 2011 to the end of the final ruling, and it is expected that the final ruling will be announced on September 17, 2011.

Mr. Chen Rongjian, manager of Foshan Woma Glass Products Co., Ltd., was completely surprised. “73% of tariffs have blocked the way companies go to Europe.” Chen Rongjian said that as a result, companies have to make strategic adjustments to reduce their excessive dependence on the European market. At present, Wal-Mart's nearly 20% to 30% of its products are exported to the European market. Chen Rongjian pointed out that the company will rapidly begin to expand the market in the United States and Southeast Asia and explore “export to domestic sales”. “But at the beginning of production and design, the positioning of related products was already very clear. Exports to domestic sales may not be in line with the appetites of Chinese consumers.” Chen Rongjian lamented that domestic channels have been solidified and it is not easy to win a share.

Industry sources pointed out that the ceramic industry, Foshan City, Guangdong Province will become the "hard-hit area" of the sanctions, a group of ceramic companies will be expelled from the EU market. However, there are also views that, given that this result is only a "preliminary ruling," companies still have "a trace of hope" for turning over at the final ruling.

Ceramic companies suffered a heavy blow According to the European Union’s announcement, three companies that received separate tax rates were Guangdong Xinruncheng Ceramics Co., Ltd., Shandong Yadi Ceramics Co., Ltd. and Guangdong Weimei Ceramics Co., Ltd. with tax rates of 35.5% and 36.6%, respectively. 26.2%. The corporate tax rate for cooperation but not drawn is 32.3%, and other ceramic companies have a general tax rate of 73%.

The office of the China Ceramics Industry Foshan revealed that due to the anti-dumping case, it is estimated that 15% of the enterprises will be closed, affecting tens of thousands of employees. In Chen Rongjian's view, this figure is still somewhat conservative. Many SMEs will face the worry of reshuffle. It is reported that there are currently more than 1,500 Chinese ceramic companies affected, and foreign trade companies engaged in ceramic-related industries will also be affected to varying degrees.

The Minmetals Chamber of Commerce’s Law Department official said that in all the responding companies, except for the three companies that were selected, the remaining cooperative companies must pay an average tax of 32.3%. "Companies that have to pay a 73% tariff are those that do not participate in responding, and they will face the tragic fate of being eliminated by the EU market." The source further pointed out that it can be ascertained that there are about 115 Chinese companies involved in responding. However, the survey found that nearly 1,500 Chinese companies exported tiles to Europe, most of which were trading companies. If these companies were unable to provide valid certification, they would be dragged into 73% of the "minefield."

However, for responding companies, tariffs of 20% or even 30% are still “abnormally high”. Chen Rongjian told reporters that high tariffs will undoubtedly force companies to raise export prices and thus lose competitiveness in the European market. Chen Rongjian believes that there is no doubt that the company has lost more customers.

The final ruling may have a reversal hope that there is news that China Minmetals Chamber of Commerce and the Ceramic Industry Association will continue to negotiate and contact with the EU to resolve the anti-dumping crisis.

Chen Rongjian bluntly stated that he is most worried about the outcome of the final ruling and "maintains the original verdict." As a result, companies are bound to fall into desperation under high tariffs of 5 years or more.

Then, can the EU's final ruling result show a "turnaround"? Fu Donghui, director of Beijing Jintiancheng Law Firm and a senior EU market lawyer, frankly stated that as long as the main contradiction of the problem is grasped in the next defense, the method and strategy are appropriate, the company still has the opportunity to stand up.

Fu Donghui said that at least on the "sampling method", the EU's relevant measures are very opaque, and they are heavily doped with water. Fu Donghui further pointed out that the representation of these drawn companies in terms of "scale" and "export volume" is being questioned. If enterprises can grasp the key points in defense, and seize the time to prove, there is hope of turning over.

The Minmetals Chamber of Commerce’s relevant person also confirmed that at present, the Chamber of Commerce and the China Ceramic Industry Association will continue to organize more than 30 companies to respond to damages and other defenses, and timely request the European Union to hold a hearing and strive to achieve the EU’s hearing. The goal of "flip".