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MOF may impose anti-dumping tariffs on shoes from China in 2007

This article was published by the Taiwan Headlines on November 30, 2006. It reports that the International Trade Commission under the Ministry of Economic Affairs recently made its initial ruling on the alleged dumping of footwear from China. The verdict indicated that the cheap imports from China include men's shoes, women's high-heeled shoes, children's footwear, sports shoes, leisure shoes, and sandals. All of these have already encroached on Taiwan's footwear market.

With this initial verdict, the Ministry of Finance decided to review the case. The review is expected to be completed within 70 days, and by then the Ministry of Finance may announce its decision on the temporary imposition of anti-dumping tariffs on the imports of footwear from China.

According to market insiders, the average retail price of footwear imported from China is lower than that from Taiwan by NT$315.3 (US$9.55) per pair. In the past five years, the China imports have taken a 53-percent share of the Taiwan market. As a result, the market share of locally made shoes declined to 37.4 percent in the first three quarters of 2006, from the figure of 75.3 percent posted in 2001.

At present, most of the footwear makers in Taiwan are small- and medium-sized. They can barely compete against their larger counterparts in China, who churn out massive volumes at rock-bottom prices. In order to cope with the duping by their Chinese competitors, some shoemakers in Taiwan have either moved offshore or reduced output to lower the manufacturing cost.

Some domestic footwear makers suggest that the Ministry of Finance should levy anti-dumping taxes on shoes imported from China at a rate as high as 239 percent. This will give local footwear makers a fighting chance to compete on level ground. However, ministry officials seem to think that this proposed anti-dumping tax is too high. It may compromise the buying power of local consumers and trigger price hikes of locally made shoes as well.

If the Ministry of Finance's review confirms the dumping allegations, then it may consider different rates of anti-dumping taxes on the China-imported shoes on the basis of materials and models. According to this article, this is the second anti-dumping case filed by domestic manufacturers in the wake of unfairly priced towels from China that dented the local market in 2005.