EU slaps punitive tariffs on Chinese fibreglass

BRUSSELS: The European Union (EU) yesterday imposed punitive tariffs on certain fibreglass imports from China despite concerns that the duties will limit supply of the lightweight material used in wind turbines, cars and ships.

The duties of 43.6 per cent will stay in place for up to six months while the EU's executive body considers extending them for another five years. They aim to counterbalance illegal market dumping by Chinese exporters, which the EU says is hurting European producers.

"The significant price undercutting prevented the Union industry from passing on increased production costs ... which resulted in low and ... negative profitability levels," the EU said in its official journal.

The duties were prompted by European producer complaints that Chinese fibreglass dumped on the EU market was threatening jobs at producers such as PPG Industries and Saint-Gobain Vetrotex.

European fibreglass users such as wind turbine producer Vestas oppose higher tariffs, arguing they may create supply shortages and raise production costs for thousands of companies involved in turning fibreglass into composites used as wind turbine blades, lightweight hulls for ships and in cars.

Mindful of this standoff, the EU said yesterday its decision to impose duties might require "further careful analysis".

A vote cast on the duties last month revealed the divisive nature of the issue, with diplomats from 12 of the EU's 27 countries opposing the tax.