China tax 'could add £15 on pair of shoes'

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The Independent Online

The cost of shoes could jump by £15 a pair if the European Commission slaps a putative anti-dumping tax on Chinese footwear imports, a report warned yesterday.

European Union member states are expected to vote in favour of protectionist barriers against Chinese and Vietnamese leather shoe imports next month in a rerun of the recent textiles dispute with Beijing.

Retailers are likely to make shoppers foot the bill for any increase in duties, PricewaterhouseCoopers, the consultancy firm, said yesterday.

More than two-thirds of member states want to impose levies on Chinese imports when they vote on the issue on 24 January although the UK is fighting the move. A vote in favour of anti-dumping duties could affect a range of other products, including glass and ceramics, giving the EC a free rein to impose other putative taxes. UK retailers are also fighting the likely imposition of retaliatory duties on plastic bag imports following the impending conclusion of an inquiry into whether China, Malaysia and Thailand are dumping shopping bags on external markets.

The so-called bra wars in the summer, which followed the massive shift in textile and clothing production from the EU to China, triggered the re-imposition of quotas on Chinese importsafter intense lobbying by the likes of the Italian and Spanish garment industries.

PwC's other main prediction for 2006 is that trade buyers will dominate the mergers and acquisitions agenda as rivals seek to team up. The value of deals in the first nine months of 2005 fell to £4.6bn from £6.5bn the previous period, reflecting a drop in activity with 61 deals completed against 64 in 2004, PwC said.