EU-China Trade Dispute Over Solar Panels

Earlier this week, the European Commission imposed 20 billion euros worth of anti-dumping tariffs on solar panels from China.  (Dumping involves selling a product a less than fair market value.) News reports indicate that the average initial AD duties are 11.8%, but will increase to 47% in two months if Chinese exporters do not raise prices and reduce the volume of sales in the EU. The European Commission is also investigating subsidies provided by the Chinese government to its solar panel industry and may impose additional duties to offset those subsidies later this summer.  The European authorities  found that the dumped goods are causing injury to the domestic solar panel industry. 

On Wednesday, China retaliated by initiating anti-dumping and subsidy investigations of wine imports from France, Spain and Italy.  No tariffs have yet been imposed and the European Commission takes the position that there is no dumping or unlawful subsidization of wine exports.  It is likely this trade war will be resolved by a combination of legal actions and negotiations between these two large trading powers.

(cgb)