Europe is relaunching the war against “made in China” fiber optics. According to our information, the European Commission has decided to double, at the start of the school year, the anti-dumping duties which affect since the end of 2021 the major Chinese manufacturers in the sector. Initially set between 14.6% and 33.7%, import taxes can therefore now go… up to more than 60%.
European manufacturers of fiber optic cables, such as the French Acome and Nexans, or the Franco-Italian Prysmian, can rejoice. For years, the industry has accused China of flooding the European market by selling telecom operators on the continent optical fiber between 20% and 30% cheaper and of lower quality. In 2019, imports were so mive that several European factories manufacturing these precious gl threads, essential for very high-speed Internet, had had to temporarily cease production.
After this peak, European industrialists united in the EuropaCable union had successfully seized the Commission. At the end of 2021, their action had resulted in the first package of anti-dumping duties. But the manufacturers were quickly disillusioned: despite the taxes, the price of Chinese optical fiber at the gates of Europe continued to fall. Many of them suspected their Chinese rivals of having “absorbed” the tariffs, for example by increasing production (to bring down the cost per unit), or by cutting costs elsewhere to remain competitive.
A lack of competitiveness “even before producing”
Faced with these fears, the European Commission launched an investigation at the end of 2022 nine months to measure the effect of the first sanctions. The findings are to be formally released by September 7. But Brussels has already decided. “The Chinese have absorbed rights and created a bear market” explains a source familiar with the matter. By how much exactly? “Without giving confidential figures, the fact that customs duties have doubled gives you an idea of the price differential that remained”, smiles this same source.
This doubling should give some air to the European fiber optic sector. Industrialists in the sector have suffered the brunt of rising energy prices since the war in Ukraine. “We paid seven times more for our energy than anywhere else in the world. This means that we have a lack of competitiveness even before having started production,” laments Jacques de Heere, CEO of Acome, the European number 3 in the sector.
Added to this is the drop in demand in Europe for fiber optic cables. At this stage, the continent (including the United Kingdom) is only 55% covered by fiber optics, according to the FTTH Council. But some countries like Portugal (91%), Spain (87%) and France (77%) have almost completed the project. In this context, Chinese fiber imports had already started to decline, especially with the closure of China during the pandemic. But the structural issue of price competitiveness remained.
European manufacturers will nevertheless remain vigilant. In recent years, the Chinese fiber optic giants have bought cable factories in Spain or Poland to be able to produce locally and thus avoid customs duties. Contacted on several occasions, the Directorate-General for Trade of the European Commission did not answer our questions.