EU Imposes Heavy Duties on Chinese Solar Products

The European Commission decided to levy temporary punitive tariffs against China's multi-billion-dollar solar exports on Tuesday, in spite of strong oppositions from its major trade partner.

EU Trade Commissioner Karel De Gucht announced that the tariffs will come into effect from Thursday for the next 6 months - until the end of the full investigation at the start of December. At that time, a decision must be made on whether to impose permanent duties for up to five years.

It is expected that Beijing will respond vehemently and may retaliate against Brussels' decision. Beijing fears this case involves more than 20 billion euros (US$26 billion) and the frictions cover nearly 4-5 percent of China's trade with Europe. This endangers a large number of jobs in China.

"I would like to inform you that the European Commission has decided unanimously to impose provisional tariffs on solar panels imported from China in order to counter the dumping of these products on the European market," said De Gucht.

De Gucht said there will be two steps and as of Thursday, a tariff of 11.8 percent will be imposed on all Chinese solar panel imports. Two months later, as of Aug 6, the average tariff will be 47.6 percent and overall, the duties will range from 37.2 percent to 67.9 percent at that stage.

"Those Chinese companies which have cooperated will face lower tariffs. Those which have not co-operated will face higher tariffs," said De Gucht.

Though De Gucht said the European Commission unanimously supports his decision but in recent vote, 18 out of 27 member states have voted against his proposal. And German Chancellor Angela Merkel has strongly been against it.

The EU's decision to impose duties on solar panels from China is a job-threatening mistake, said Robert Sturdy, vice-president of the European Parliament's International Trade Committee.

He believes that anti-dumping cases must always consider wider interests of the EU, and in this case such duties will do far more harm than good, costing jobs, forcing up prices for consumers, running contrary to EU environmental policy, and damaging the trading relationship with China.

"These duties are going to damage businesses that install solar panels, and force up prices for consumers," said Sturdy. "We are sending out very bad signals about our environmental commitment and our trading relationship with Asia.

"If the EU is to grow its economy, then we need to put the wider picture ahead of parochial interests and make trade defense decisions based on the wider ramifications that they could have."