TiO ˇ: Six negative impacts of anti-dumping measures on the EU

Nicolas Dujardin, chief operating officer of Oc é inde, expressed concern about the recent implementation of Chinese anti-dumping duties on titanium dioxide and warned that these measures could undermine the competitiveness and environmental goals of the EU paint and paint industry.

Impact on the cost and Competitiveness of European Enterprises

Anti-dumping duties imposed by the European Commission can be as high as 39.7 per cent, which will lead to a sharp rise in the cost of imports of titanium dioxide from China, a key ingredient in industries such as paints, plastics and cosmetics. Currently, imports of titanium dioxide from China are about 10% cheaper than those made in Europe, and the price is likely to rise from 2.50 euros per kilogram to 3.50 euros per kilogram. Rising costs directly affect the profit margins of European companies, especially small and medium-sized enterprises, because titanium dioxide accounts for 30% of their production costs. Higher costs could force these companies to go bankrupt or shift production outside the EU.

Increased risk and cost of supply chain

At present, Europe is facing an annual production gap of about 250000 tons of TiO, which lacks the ability to quickly replace Chinese imports. Such shortages can lead to supply chain disruptions, forcing companies to switch to more expensive or unreliable sources, further pushing up production costs and threatening business continuity.

Impact on employment and innovation

The paint and paint industry, which accounts for 5-6 per cent of the European chemical industry and employs about 110000 people, is particularly vulnerable. As costs rise and profitability declines, many companies may be forced to close, leading to mass unemployment and weakening Europe's industrial ecosystem. This situation may hinder investment in innovation and slow the development of sustainable solutions, which runs counter to the EU's green agreement goals.

Conflict with EU environmental objectives

Anti-dumping measures could also damage the EU's environmental objectives. If European companies are forced to import finished products containing TiO grains instead of raw materials, this will greatly increase carbon dioxide emissions because of higher transport costs. The result is a direct violation of the EU's commitment to reduce emissions and could undermine the credibility of European climate policy.

Disproportionate measures benefit a small number of large enterprises

Finally, it must be pointed out that the current difference in the price of titanium dioxide between China and Europe is only about 10%, which is much lower than the 39.7% tariff imposed by the European Commission. This raises the question of whether the measure is really about fair competition or whether it is designed to protect the profit margins of a handful of large, mainly US-owned manufacturers set up in Europe. Such a policy could eventually weaken the industrial structure of larger and more critical small and medium-sized enterprises, which are more important to local employment and the European economy.

Long-term strategic risks of EU industry

Another concern is that this could cause long-term damage to the EU's strategic autonomy in key sectors. By imposing such high tariffs, the EU is likely to become more dependent on external sources of finished goods, as European manufacturers may struggle to compete or maintain operations in China because of rising costs. This could undermine the EU's broader strategic goal of enhancing industrial resilience and self-sufficiency and ultimately undermining its industrial strategy and the goal of a sustainable competitive future. In short, while the intention behind these anti-dumping measures may be to protect European TiO producers, the potential consequences for the European industry as a whole are deeply worrying. In order to avoid serious economic impacts, it is necessary to take a more cautious approach to consider the impact on the competitiveness of small and medium-sized enterprises and European industry as a whole. Not to mention the forced increase in the price of the end customer as a result of this tax.

Part 2: solve the problem

In the second part, Dujardin describes solutions that he believes are more effective and minimize the risk of European paint manufacturers.

Gradually implement the responsibilities:

Instead of imposing a tariff of 39.7% immediately, the EU could gradually impose tariffs over a few years. This phased approach will give companies time to adjust their pricing structure, find alternative suppliers or invest in local production without sudden financial pressure.

Tuning support:

Provide financial assistance or tax breaks to companies in the industry to help them manage the transformation. This may include funding research or subsidies for alternative raw materials to temporarily offset the increased costs.

Invest in TiO production in Europe:

The EU can encourage investment in local TiO production facilities through subsidies, low-interest loans or public-private partnerships. This will reduce dependence on imports, increase self-sufficiency and stabilize the supply chain. It has to be an European manufacturer, in fact only foreign companies.

Innovation Grant:

Promote the research and development of more efficient and environmentally friendly TiO production methods to ensure that European manufacturers can compete with their international counterparts in terms of cost and quality.

Supply chain diversification:

The industry is encouraged to diversify its supply chain by purchasing titanium dioxide from multiple regions, not just China. This may involve trade agreements with other countries or regions that produce titanium dioxide at competitive prices.

Cooperation: create a platform for knowledge sharing and cooperation among European producers, importers and manufacturers to optimize supply chain efficiency and reduce costs.

European and non-European companies are encouraged to establish joint ventures or cooperation to share technology, reduce production costs and improve global competitiveness.

Price monitoring and consumer price stabilization measures:

Implement a price monitoring mechanism to prevent excessive price increases from being passed on to consumers. This may include the implementation of temporary price caps or government subsidies during the adjustment period.

Consumer awareness activities:

Promote consumers the importance of supporting European-made products, provide reasonable reasons for small price increases, while emphasizing the advantages of local production in terms of quality, environmental impact and job creation.

By implementing these measures, the EU can create a more resilient and competitive paints and coatings industry that benefits all stakeholders:

• For TiO2 producers: Increased investment in local production and innovation will ensure they remain competitive globally while reducing dependence on imports.
• For TiO ˇ users: Phased tariffs and financial support will allow companies to adapt without facing immediate financial difficulties.
• For consumers: Stable prices and the promotion of European-made products will ensure that consumers can continue to have access to high-quality paints and coatings without causing excessive cost increases.
• For the environment: Encouraging local production and innovation is in line with the goals of the EU Green Agreement, promoting sustainable industrial practices and reducing carbon footprints.
• Overall, a balanced approach that combines gradual implementation of tariffs, investment in local production and strategic cooperation will ensure that the European paint and coatings industry remains strong and competitive, benefiting producers, consumers and the wider economy.