The UK Lifts Anti-Dumping Duties on Non-Folding Chinese E-Bikes
In a significant policy shift this February, the UK Government decided to take a recommendation from the UK Trade Remedies Authority (TRA) to remove anti-dumping measures on non-folding e-bikes of Chinese-origin. This move seeks to reduce consumer costs of £200 per unit.
The removal of this secondary duty has sparked concerns amongst UK e-bike manufacturers, who now face the challenge of competing with a surge of cheaper alternatives being placed on the market – a situation that may compound as Chinese manufacturers face fresh obstacles of their own with increasing EU and US tariffs.
However, there is hope for UK manufacturers. With the help of inward and outward customs procedures, they can reduce costs and enhance their competitiveness – providing much-needed relief when navigating the new market dynamics.
If you’re engaged in the UK e-bike supply chain, find out how to cut costs and explore fresh market opportunities with the insights provided by our Senior UK Consultant Nicola Haynes in this article.
This Anti-Dumping Duty reversal creates a well-timed opportunity for Chinese manufacturers
At a time when the European and American markets are tightening regulations, the TRA‘s removal of the 10.3% – 70.1% anti-dumping duty unlocks a key trading opportunity for Chinese manufacturers of non-folding e-bikes.
In fact, the UK could see a return to 2018 levels of importation – when over 800,000 Chinese electric bikes were sold on the market. When the anti-dumping duty was introduced in 2019, this figure dropped to circa 54,000, indicating a significant impact on the industry.
Similarly, Chinese e-bikes were hit with a 25% tariff in the US in 2018, and the EU mirrored the UK’s introduction anti-dumping duties in 2019.
“Chinese manufacturers have faced challenges in the European and American e-bike markets with the near-simultaneous introduction of tariffs in recent years” comments Haynes. “The removal of the anti-dumping duty on the UK market opens the floodgates for low-cost imports, and puts pressure on UK producers in an already competitive market.”
Customs procedures offer a competitive lifeline to UK manufacturers
Whilst a £200 consumer saving is a significant blow to British e-bike manufacturers, there are lifelines available to those who are looking to redirect sales to Europe or reduce their production costs with third-country labour.
Reduce import duty on foreign sales with Inward Processing Relief (IPR)
Using Inward Processing Relief allows you to claim a reduction or removal of import duty on eligible components, when those same components will be reexported as part of a finished product.
“For UK manufacturers targeting the European or American markets, IPR can significantly reduce your production costs” says Haynes. “Chinese producers still face tariffs in the EU, and European exporters must now navigate higher US tariffs in comparison to the US. The opportunity is there.”
Note that you cannot claim this relief for goods which are sold domestically.
Furthermore, there are considerations when using the inward processing procedure:
- A customs authorisation is required, which can take 30-days to acquire in the UK.
- Strict monitoring and compliance systems are required.
- Foreign importers may be unable to claim UK preference if duty was not paid on the parts during manufacture. This is known as the “no drawback” rule, which applies to certain regions or commodities. For trade with the European Union, you can currently use IPR and claim preference on the EU import.
Note that companies within the European Union can also use IPR for selling goods to the UK, meaning you can explore cheaper manufacturing options inside the EU for selling on the UK market.
The Customs Support Group provides comprehensive support with customs assessments, customs authorisation and IPR management in the UK and across Europe. Contact us for more information.
Taking advantage of lower manufacturing costs abroad with Outward Processing Relief (OPR)
Where IPR allows for processing domestically, OPR flips this concept. Using the outward processing procedure, a UK manufacturer can send a part abroad and then deduct that part from the duty obligation when importing the finished product.
For example, a motor can be produced and tested in the UK, then sent to an assembly plant abroad and reimported as part of a finished bike.
This is particularly useful for managing labour costs, but some manufacturers prefer to take domestic ownership when producing some components.
“Regulations on parts and quality assurance are key components of e-bike production.” says Haynes. “With the right planning, OPR is a strong option for manufacturers who are looking to balance cost, quality, and compliance.”
Like inward processing, outward processing comes with complex considerations:
- A customs OPR authorisation is required
- Freight and logistics costs must be factored in and may change without notice.
- Third-country duty costs may be incurred and may change without notice. This includes rules for IPR in the third country and preferential origin requirements.
Responding to duties and changing gears as a UK e-bike manufacturer
Providing customs and trade solutions throughout Europe, CSG is here to help you unlock the cost-efficiency hidden within your customs function. If you are concerned about how to stay competitive in the UK e-bike market and want to explore your options, then we’d be happy to help you.
“Working with a customs and trade expert helps you to make important decisions quickly.” explains Haynes. “What we have seen with industry shifts like this, or global situations like the US tariffs, is that those who have data visibility and specialist guidance are the ones who remain versatile when time is of the essence.”
