EU Hits Egyptian Raw Material With Tariff Aimed at Chinese Firm

(Bloomberg) --

The European Union imposed a tariff on an industrial material from Egypt in a dispute involving Chinese interests.

The EU duty of 8.7% on Egyptian glass fiber reinforcements is meant to counter alleged subsidies to Jushi Egypt for Fiberglass Industry SAE, a unit of China Jushi Co. that is located in the China-Egypt Suez Economic and Trade Cooperation Zone.

EU manufacturers including European Owens Corning Fiberglas SPRL in Belgium and Johns Manville Slovakia AS suffered “material injury” as a result of trade-distorting Egyptian government aid to Jushi Egypt, the European Commission, the bloc's executive arm in Brussels, said on Friday in the Official Journal.

The levy, due to take effect on March 7, is the preliminary outcome of a subsidy probe that the commission began last June after a complaint by an association representing European manufacturers of glass fiber reinforcements. The commission has until early July to decide whether to prolong the duty for five years.

Egypt's share of the European market for glass fiber reinforcements almost tripled to 14% in 2018 compared with 2016, the commission said.

The Chinese share fell to 5% from 8% over the same period, according to the commission. It cited the impact of existing EU anti-subsidy duties on glass fiber products from China and of separate levies on those shipments meant to counter alleged below-cost -- or “dumped” -- sales.

“The market share for these imports is declining, as importers move from China-origin glass fiber reinforcements to Egypt-origin glass fiber reinforcements from the same Jushi Group,” the commission said.

The trade-distorting Egyptian aid to Jushi Egypt entails an exemption from value-added tax and import tariffs for equipment used by producers located in the China-Egypt Suez Economic and Trade Cooperation Zone, according to the commission.

To contact the reporter on this story: Jonathan Stearns in Brussels at jstearns2@bloomberg.net

To contact the editors responsible for this story: Ben Sills at bsills@bloomberg.net, Richard Bravo, Raymond Colitt

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