A European Union plan to extend a hefty tariff on Chinese and Vietnamese shoes by at least 15 months has sparked an outcry from the world's largest footwear manufacturer and major retailers. The European trade bloc was likely to extend an anti-dumping tariff of up to 16.5 per cent on Chinese-made footwear from January 3 next year, Reuters reported yesterday. The move was hotly contested by the European Footwear Alliance, which represents retailers such as Nike, Adidas and Timberland. Some industry associations in Hong Kong said that extending the tariff would put the nascent recovery of the manufacturing sector in jeopardy and cause far-reaching ripple effects in the supply chain. The EU first imposed duties of up to 16.5 per cent on Chinese-made shoes and 10 per cent on those made in Vietnam in 2006 after EU manufacturers accused the two governments of unfairly subsidising their shoemakers so that EU producers could not compete. The latest plan also came at a time when Vice-President Xi Jinping is on a European tour. Yue Yuen Industrial (Holdings), the world's largest producer of athletic and casual footwear and a supplier to brands such as Nike, Adidas and Puma, said the extension would jack up costs. 'We stand behind our customers. Obviously, it is bad news for everybody in the business,' Yue Yuen investor relations director Jerry Shum said yesterday. 'For the sake of free-trade spirit, the anti-dumping duty should be removed.' Shum would not say how the company could offset the extra cost arising from the duty. In the nine months to June, Yue Yuen sold fewer pairs of shoes to Europe - the group's worst-performing market - with sales down 0.6 per cent at US$909.1 million. This represented 23.9 per cent of its total sales of US$3.81 billion. The group's underlying profit rose 9.5 per cent to US$341.2 million in the period. The European Footwear Alliance said it paid about Euro800 million (HK$9.16 billion) in anti-dumping duties in the past 3 1/2 years and said it failed to know who had benefited. The EU is expected to decide on the extension by November 20. Hong Kong Small and Medium Enterprises Association chairman Danny Lau Tat-pong warned that extending the anti-dumping duty could trigger a negative chain reaction to material suppliers, workers and periphery industries, such as logistics and professional services. 'It will hurt the recovery of the sector,' he said. 'Running a factory, especially in the labour-intensive shoe industry, remains extremely difficult.' Lau said Hong Kong shoe manufacturers across the border should step up efforts to expand into the mainland market no matter how challenging the expansion was. He added that a growing number of protectionist measures in the United States and the EU added to the hostile operating environment. The Federation of Hong Kong Industries estimated 10 per cent of 70,000 Hong Kong factories on the mainland had shut down this year because of the tough economy.