EU imposes levies on Chinese solar panels

BRUSSELS: The European Commission said Tuesday it would impose anti-dumping duties on imports of Chinese solar panels, defying German-led opposition and dire warnings from Beijing the move could spark a trade war.

"Today, the European Commission has decided unanimously to impose (punitive) tariffs" on Chinese solar panels after finding they were being sold at up to 88 percent below cost in the European market, EU Trade Commissioner Karel De Gucht said.

De Gucht said it "is clear that the dumping" is harming the European solar panel industry, with 25,000 jobs threatened.

Accordingly, the Commission would levy an initial average tariff of 11.8 percent from June 6, rising to 47.6 percent on August 6 in the absence of negotiations based on a Chinese commitment to address the problem. "I want a fair solution with China," De Gucht said, adding that Tuesday's decision opened the way to talks, if Beijing wanted them. "The ball is now in China's court."

The Commissioner insisted that the measures were not protectionist but rather within the EU's rights under international trade law, to protect its interests. China has solar panel production capacity equal to 150 percent of world demand, he said, and that meant they were manufacturing too much.

The tariffs are provisional for six months, with EU member states having a vote in December on whether to make them permanent or not. In recent weeks, Germany has led growing opposition to the move, garnering the support of 17 other member nations including Britain but not France.

Berlin says the tariffs are not needed, stressing the wider trade relationship with China which was worth some 500 billion euros last year. But De Gucht said it was up to the Commission, the EU's executive arm, to make the final decisions in trade matters as it was "independent" and sees the "bigger picture".

The EU and China find themselves now locked in a series of trade disputes, ranging from solar panels and telecoms for Brussels, to chemicals and steel tubes for Beijing, amid concerns they could lead to broader trade war. China had warned earlier this month that introducing tariffs on solar panels could result in just that outcome, which both sides also say they want to avoid.