On March 13, the European Commission decided to impose countervailing duties on Moroccan aluminum wheel imports to “protect European producers and safeguard 16,600 jobs against unfair trade practices.” These surcharges—ranging from 5.60% to 31.45%—primarily target Dika Morocco Africa (a subsidiary of Chinese auto parts maker Citic Dicastal) and Hands 8 (a subsidiary of South Korea’s Hands Corporation). They add to the anti-dumping duties already imposed on Moroccan imports of the same product on January 12, 2023, which ranged from 9% to 17.5%.
The Commission’s latest decision follows an anti-subsidy investigation launched over a year ago after a complaint filed on January 3 by the European Wheel Manufacturers’ Association. Reason? The trade group accuses Moroccan producers of receiving state subsidies, thereby harming EU industry.
“An anti-subsidy investigation by the Commission revealed that the Moroccan government systematically supports its automotive sector through subsidies non-compliant with World Trade Organization (WTO) rules, including direct grants, preferential-rate loans, and tax exemptions or reductions,” the European Commission stated in a release.
Morocco’s Ministry of Industry and Trade, which hired an international law firm at the start of the investigation to defend manufacturers’ interests and prepare a defense dossier for Brussels, plans to appeal the decision. It argues the ruling violates the WTO’s Agreement on Subsidies and Countervailing Measures (ASCM).
A “marginal” impact
The impact of these countervailing duties remains minimal on Morocco’s automotive industrial platform, “as it affects only one product,” asserts Adil Zaidi, president of the Automotive Federation, in an interview with TelQuel.
“Morocco has built a credible, competitive, and powerful industrial base. Naturally, this unsettles certain players who feel threatened”
“For now, only one product is affected, so the impact remains marginal. Today, Morocco has built a credible, competitive, and powerful industrial base. Naturally, this unsettles certain players who feel threatened. But if these players feel threatened, it is first and foremost proof of this industrial base’s strength and viability. We wouldn’t be targeted if we weren’t performing,” he insists.
However, if these measures were extended to other strategic products or sectors, they could have a far more significant impact on Morocco’s appeal as an industrial hub. Beyond the taxation of aluminum wheels, a proliferation of trade barriers could deter foreign investors from establishing operations in the country.
According to industry sources, plans for Dika Morocco Africa’s fourth factory—originally slated for Kenitra—have reportedly been canceled in favor of an ongoing investment to build a plant in Portugal.
A partner above all
According to the president of the Automotive Federation, the European Commission’s decision would primarily harm European Union (EU) countries. By imposing countervailing duties on imports from Morocco, the EU risks raising the cost of parts and components essential to its industry, thereby reducing the competitiveness of European companies in the international market.
According to him, this approach would amount to “sawing off the branch Europe is sitting on,” as European importers, directly impacted by these new measures, would see their procurement costs rise, thereby affecting the profitability of automakers and other industries dependent on these value chains.
“Morocco has always adhered to international trade rules, particularly under its free trade agreements. The kingdom, as Europe’s strategic partner just 14 kilometers away, should represent an opportunity—not a threat—enabling European industries to secure their supplies more efficiently than if they relied on suppliers located thousands of kilometers away,” he explains.
Sino-Moroccan cooperation under scrutiny
The investigation specifically targets cooperation between Morocco and China. According to the European Commission, one of the producers under investigation allegedly benefited from subsidies linked to Moroccan-Chinese collaboration—particularly following Morocco’s integration into the “One Belt, One Road” Belt and Road Initiative.
Adil Zaidi maintains that Chinese companies invest in Morocco because the country offers a mature and competitive industrial base—not due to favoritism or unfair state support. He advocates that an approach based on cooperation and mutually beneficial integration would prove more advantageous for all parties than imposing trade barriers.
Already targeted
This is not the first time Moroccan-made aluminum wheels have been targeted. In November 2021, the European Commission opened an anti-dumping investigation into imports from the Moroccan subsidiaries of Asian giants Citic Dicastal and Hands Corporation, following another complaint filed by the European Wheel Manufacturers’ Association. The trade group accused Moroccan producers of pricing practices that negatively impacted “sales price levels, quantities sold, market share, and profits of the EU industry.”
After an eight-month investigation—during which arguments from all stakeholders were heard and analyzed—the European Commission imposed provisional anti-dumping duties in July 2022: 8% on Hands Corporation imports and 16.5% on imports from all other Morocco-based companies, for six months.
The Commission stated it “had sufficient evidence indicating that imports of the product in question were being dumped” and that “the increased volume of imports from Morocco, combined with their low average sales prices, harmed the financial situation of the EU industry.”
Though Morocco and the EU are bound by a free trade agreement, Article VI of the 1994 GATT (General Agreement on Tariffs and Trade) and the WTO’s 1994 Agreement on Implementation of Article VI of GATT permit states to impose anti-dumping measures to ensure fair trade and protect domestic production.
Written in French by Safae Hadri, edited by Eric Nielson
