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China trade war fears remain despite EU solar ruling

Tuesday, June 04, 2013 - 02:38

June 4 - The European Union is going to press ahead with imposing duties on billions of euros of solar panels imported from China, despite resistance from Germany and other member states who fear it could spark a trade war. As Joanna Partridge reports from Berlin, the import tariffs will be phased in and people close to the matter say Brussels is trying to reach a deal quickly with Beijing.

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The European Commission will introduce import tariffs on Chinese solar panels. But it has now decided to phase them in - a compromise of sorts. The planned import tax of 47% had proved unpopular with some EU member states - afraid it might spark a trade war with China. Karel de Gucht is the EU Trade Commissioner. SOUNDBITE: Karel de Gucht, EU Trade Commissioner, saying (English): "As of the 6th of June a tariff of 11.8% will be imposed on all Chinese solar panel imports. Two months later, as of the 6th August, the average tariff will be 47.6%. Overall the duties will range from 37.2% to 67.9% at that stage." The EU's been investigating whether Chinese firms have been selling solar panels in Europe below cost price. European firms say China has come from nowhere to take almost 80% market share in 2011. And in less than 5 years, Chinese imports have driven down the cost of solar modules by 80%. That has hit European producers - and several have filed for bankruptcy. PTC It was a German solar panel manufacturer which first complained about cheap imports from China. But Germany's leading other EU member states, which don't want to see import tariffs introduced. Berlin believes China could retaliate, and that's something German exporters don't want to risk. The solar "dumping" is the largest trade case Brussels has ever looked into. It has really tested whether EU countries are willing to unite behind the European Commission on global trade issues. The U.S. introduced sanctions on Chinese solar panels in 2012 but they aren't as broad as the European ones. Brussels and Beijing now have two months to find a solution to the dispute, before Chinese firms feel the full force of the duties. Kevin Allison is from Reuters Breaking Views. SOUNDBITE: Kevin Allison, Reuters Breaking Views, saying (English): "With the split in Europe, China may sense weakness and I still think there is a chance of a trade war - tit for tat retaliation for the solar panel tariffs - for example if the Chinese laid on tariffs for polysilicon which is the raw material in panels which Europe isn't very good at making - that could lead to damaging consequences for everyone." Demand for solar modules keeps booming, and European firms want to keep taking advantage of that. But at a time when Europe is desperately looking for growth - upsetting a good customer may not be a wise move.

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China trade war fears remain despite EU solar ruling

Tuesday, June 04, 2013 - 02:38