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Potential Trade War With China Over Solar Panels

Last Thursday the European Commission announced that an investigation was to take place into China allegedly exporting almost £16 billion of solar panels into the EU. In July a number of leading European manufacturers of solar panels complained that China had been exporting the solar panels but were making a loss doing so.

The commission stated: “In terms of import value affected, this is the most significant anti-dumping complaint the European commission has received so far.”

China makes two thirds of the world’s production of solar panels with 80% going to the EU. In only a matter of a few years, China has developed into being the largest producer of these panels in the world with the EU being the biggest importer of solar panels.

Because a number of German solar power producers are at the forefront of the complaint this has placed the German Government in a difficult situation as they enjoy an excellent relationship with China as far as the export and import of goods goes. Recently, Angela Merkel, the German Chancellor, on a visit to China, tried to diffuse the matter suggesting that dialogue between the two countries was better than an EU investigation being carried out.

China Daily, an English-language newspaper, said that Beijing would impose trade curbs against the EU if the investigation took place.

It was a group of twenty European producers of solar panels, who account for 25% of the manufacture of EU solar panels, that raised the complaint.

The Americans have already imposed tariffs on the export of solar panels.

A provisional verdict is expected by next June at which time China could have temporary tariffs imposed upon it. A final decision would then need to be taken by EU countries by the end of 2013.

There was a quick reply via the Chinese commerce ministry website that said: “Restricting China’s solar panel products will not only hurt the interests of both Chinese and European industry, it will also wreck the healthy development of the global solar and clean energy sector.”

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