17.06.2024

EU AWP dumping - tariffs set

The European Union has issued its initial findings into the claim and complaint that Chinese manufacturers have been selling aerial work platforms in Europe at ‘dumping’ prices, which has the potential to damage European based industry, reducing their revenues, profitability and employment levels.
See: EU anti-dumping investigation into Chinese platform manufacturers

We understand that the initial findings were not clear cut, and that there was therefore a second complaint in March, suggesting that manufacturers importing Chinese built products were stockpiling equipment in order to avoid any tariffs that might be applied. It was suggest that a comparison be made of imports after the invesitgation notice was published compared to the same period a year earlier.

As a result it found that imports of Chinese built products increased 16.1 percent in the first quarter of this year, and deciding that this was abnormal, it has issued preliminary tariff levels for each manufacturer – See below - and ordered the customs authorities to start registering all imports of aerial lifts from China, with the possibility that should tariffs eventually be imposed they may be charged retrospectively. The companies involved and all other interested parties which now have the chance to comment on these findings. The registration order lasts nine months and then expires, if there are no further developments.

In the words of the document:

“Therefore, the Commission has concluded that there is sufficient evidence to justify making the imports of the product concerned subject to registration in accordance with Article 14(5) of the basic Regulation.”

“All interested parties are invited to make their views known in writing and to provide supporting evidence. Furthermore, the Commission may hear interested parties, provided that they make a request in writing and show that there are particular reasons why they should be heard.”

“The customs authorities are hereby directed, pursuant to Article 14(5) of Regulation (EU) 2016/1036, to take the appropriate steps to register imports of mobile access equipment designed for the lifting of persons, self-propelled, with a maximum working height of 6 metres or more, and imports of pre-assembled or ready-to-assemble sections thereof, excluding individual components when presented separately, and excluding person lifting equipment mounted on vehicles.”

The provisional tariffs for those sampled include:
Sinoboom - 56.1%
JLG - 23.6%
Genie – 25.6%
Dingli – 31.3%

Other manufacturers that co-operated but were not sampled: - 32%
They include:
- Lingong
- Haulotte
- Mantall
- Liugong
- Zoomlion
- XCMG
- Sunward
- Fonteq
- Reeslift

Manufacturers not sampled/All others - 56.1%

The documentation is extensive and full of legal text, jargon and caveats. And although it was published on May 23rd, for some reason we have only just received it, in spite of communicating directly with the Commission's media department. As a result we have only had an hour or so to digest the information. As a result, we will ask more questions, speak to some of those affected and update this item as soon as we learn more and then at that time add a comment. In the meantime, we will suspend the comment section - although you are most welcome to send any inputs and comments to [email protected]

UPDATE

The Commission has now issued a further statement clarifiying that the group it previously listed as companies not co-operating, was actually companies that had not been sampled - checked - as part of the initial investigation.

Initial Comments received - unedited

From Sinoboom
"Sinoboom has received news of the proposed tariff on its imports of MEWPs to the EU with great concern and surprise. The privately owned company has cooperated fully with the investigations and supplied all required information. It is now liaising with the European Commission to understand how to resolve this challenging and concerning situation. An appeal is being prepared."

"Sinoboom and its team of employees around the world remain committed to providing a high quality, competitive customer oriented service. Sinoboom is led by the original founders, the husband and wife team of Susan Xu and Stephen Liu. They extend their thanks to all Sinoboom partners and team members in Europe for their support at this challenging moment in the company’s history."

"The company continues to collaborate fully with all relevant authorities and is determined that there will be no interruption in the services provided to its customers and its continuing growth strategy. This includes the ongoing development of its manufacturing facilities in Poland."

Vertikal Comment

The news that the EU is to apply massive tariffs to a range of platform manufacturers comes as no great surprise, although the provisional tariff suggested for Sinoboom is hard to understand.

A couple of months ago, we heard, from a reliable source, that the Commission’s initial investigation hadn’t shown any significant across the board dumping by the companies that were ‘sampled’ – the four largest importers of Chinese built lifts. We understand that the Commission was then informed – unofficially - that it was ‘sampling the wrong companies’, it responded by saying that it would also look at the possibility of unfair government subsidies. If so this would most likely affect the larger general equipment manufacturers, that may have had some form of local or national government involvement.

Strsngely, unless it changed mid-investigation, the Commission used Brazil as a comparative third country to determine whether machines built in China, were being dumped in Europe – which makes no sense. Turkey, South Africa, India and perhaps, better still, other Asian markets such as Korea, Thailand or Taiwan would have been more sensible. As to why it did not use pricing in China – it is apparently due to it not being considered a free market economy. As far as we are aware Chinese built machines are not being sold in Europe at lower prices than in their home market, which has traditionally been used to determine if a company had been guilty of ‘dumping’.

Having said all that, there is no question that the European production of aerial lifts, is under threat from imports from China, and strategically, at least, that needs to be considered. However, this is not a new phenomenon. In the early days of the powered access market, European manufacturers struggled to compete with US based companies, due to their much larger home market, higher production volumes and modern factories. Conversely in the aviation market, Airbus would never have got off the ground without government subsidies and support, helping it compete with Boeing.

In another example new entrants into the mainstream telehandler market struggle to compete with JCB or Manitou, which have substantially higher production volumes. We know of one American manufacturer that entered the market, only to find that its production cost for a very basic 17 metre telehandler was higher than the retail price of the aforementioned manufacturers whose models included all the bells & whistles – such cabs with radios and air-con. That was a good few years back – but it killed that business.

I could go on but this is a provisional finding and subject to appeals and comment. Eventually, it could be dropped if it was thought to be against the overriding interests of the European Union. One wonders though if the complaint might just be a convenient way for the EU to fire a warning shot at Beijing, regarding what it considers to be a more critical issue – electric cars, batteries and solar panels where the imposition of tariffs would be more damaging to the European economy and consumers.

If these tariffs do go ahead the prices for new machines will inevitably rise of course and while manufacturers margins will improve, rental company buyers will not be too happy, unless they can pass the increases on to their customers – the contractors. One positive for them might be that the value of their fleets could improve as used equipment prices rise in concert with higher new machine prices.

It will be interesting to see how this develops.