Not only have orders decreased but distributors want prices dropped as some are now only ready to pay 21 yuan ($2.50) for a pair of leather shoes.
The European Commission (EC), the EU ruling body, will phase in,over the next six months, a duty that will rise from 4 percent to 19.4 percent.
"If EU franchisers want to shift the cost of the tariff to Chinese shoe exporters, it will inevitably hurt Chinese shoe makers by going on to slash manufacturers' meager profits," said Hong Guangsheng, manager of the Guangzhou Yunfang Shoe Trade Co. Ltd.
The company, based in south China's Guangdong Province, exported 500,000 pairs of shoes to Italy last year. However, its distributors in Italy cut April's new order by half and have demanded the company drop prices from 25 yuan (3 U.S. dollars) to 21 yuan (2.5 U.S. dollars) a pair.
"The EU's tariff will compel scores of small and medium-sized shoe makers to close down, menacing thousands of jobs," said Huang Rongmao, deputy secretary-general of the shoe industry council in Huizhou City of Guangdong, known as a major shoe producing base with an annual output of 600 million pairs of shoes.
The shoe industry in Huizhou includes some 3,000 making factories employing as many as 150,000 workers. Eighty-six percent of the factories have less than 1,000 workers.
"We make 1 to 2 yuan (8 to 15 cents U.S.) from a pair of shoe. If the EU maintains the tariffs, my company will give up the export market, " said Xie Chang with the Yongqing Shoe Manufacturing Co.
He said the EU's sanctions come as the cost of labor and raw materials are on the rise in China, making small shoe manufacturers more vulnerable to turbulence in the international market.
Xie said last year workers at his company earned 800 yuan (approximately 100 U.S. dollars) a month and this year they make 1,200 yuan (about 150 U.S. dollars) a month.
More than 150 of China's shoemakers have formed an alliance to defend themselves against the European Union (EU)'s anti-dumping duties and have jointly raised three million yuan (375,000 U.S. dollars) for their appeal.
Wu Zhenchang, one of the alliance, said WTO's anti-dumping protocol requires any anti-dumping prosecution to prove 15 injury indicators. However, the EU sanctions are based on only six indicators and there is no solid evidence.
It's taken China's shoe industry two decades to develop its strong manufacturing capability, trade network and trained personnel. Chinese shoe makers have also forged good cooperative relationships with European and American distributors, which will not be easily broken, said Zhu Feng, secretary-general of the Wenzhou Shoe Industry Council in east China's Zhejiang Province.
He expressed the belief that EU's sanctions on leather shoes are similar to the Sino-US textile trade rift of last year and could result in a sharp decline of China-made leather shoes on EU markets.
According to an announcement made by China's shoe industry alliance, they plan to make a "no-injury defence". The alliance's fund will be used for a worldwide campaign to show that shoes from China do not infringe on the normal order of the European market.
