British bike manufacturers are warning they face competition from a wave of cheap Chinese imports after Brexit as the United Kingdom abandons European Union(EU) anti-dumping rules.
Brompton Bicycle Ltd. and Frog Bikes Ltd. are among firms saying they risk being undercut when the Brexit transition period ends on December 31 and tariffs of up to 48.5 per cent levied by the EU on bikes imported from China stops applying. The EU introduced the levy because large state subsidies were giving the country’s producers an unfair virtue.
“We’ve got coronavirus, we’ve got Brexit, we need as a nation to be supporting industries that have potential to grow,” said William Butler-Adams, managing director of Brompton, the maker of the eponymous folding bike favored by London commuters. “There’s this implausible possibility in cycling. You would have thought the government would make stronger it and nurture that industry.”
The plight of the bike makers is an indication of the upheaval industries will face as the United Kingdom government defines its own commerce policy out of doors the EU. While opening the economy to more imports might benefit consumers, domestic producers risk being caught in a pincer between greater competition from in a foreign country and not more access to the EU market.
“We have been consulting with British bicycle producers and recognize the challenges that the industry faces,” the Branch for International Business said in a remark. “Then again, British consumers will bear the brunt of higher prices whether anti-dumping measures were retained or carried across from the EU.”
The United Kingdom is assessing every of the EU’s anti-dumping rules on a case-by-case basis. Whether British producers account for not more than 1 per cent of the domestic market, the government will drop the anti-dumping tariff.
Frog Bikes, which makes a speciality of making bikes for children and employs approximately 80 people, said it submitted evidence to the government in July showing that domestic producers make up more than 3 per cent of the United Kingdom market, according to Shelley Lawson, the company’s co-founder.
She said her company’s recent efforts to contact the Business Remedies Authority, the government agency responsible, have gone without reply, meaning she doesn’t realize the basis for the decision or how it could be appealed.
A Branch for International Business spokeswoman couldn’t immediately remark on the ruling.
“It’s a substantial threat to us,” said Lawson, whose firm generates approximately 10 million pounds ($13 million) in sales every year. “It’s not good for the cycling consumer at all,” she said.
Frog Bikes, which generates 50 per cent of its sales in the EU, said it fears being hit both by cheaper imports from China and potential tariffs on commerce with the EU. Even with a commerce deal, their customers in the bloc will find it harder to source their bikes as a result of additional customs formalities, Lawson said.
“The United Kingdom market is going to grow to be even more important to us,” she said. “We’re doubly concerned we’re going to be much less competitive inside our home market as polite.”