EU to impose high tariffs on Chinese solar panels to check dumping

In the largest EU commercial dispute of its kind, the EU has imposed tariffs  up to 67.9 per cent on the  import of solar panels from China in bid to revive the European solar industry.

The duties aim to punish Chinese solar panel manufacturers dumping their solar panesls below cost in the 27-nation EU. Among the over 100 companies targeted are Yingli Green Energy Holding Co, Wuxi Suntech Power Co and Changzhou Trina Solar Energy Company.

EU producers including Germany's No1  Solarworld AG, maker of the renewable-energy technology, have suffered ''significant harm'' due to dumping by China, according to a statement yesterday by  the European Commission, the bloc's trade authority.

According to the commission 25,000 jobs in EU solar production would likely be lost without the import taxes.

The EU's action ''is an emergency measure to give life-saving oxygen to a business sector in Europe that is suffering badly from this dumping,'' European trade commissioner Karel De Gucht told reporters.

The levies, published yesterday in the EU's Official Journal would take effect today at an initial lower rate of 11.8 per cent for six months which may be prolonged for five years.

According to de Gucht, the tariffs would rise to 47.6 per cent in August if the Chinese government failed to put an end to the systematic effort by Chinese companies to dump solar panels in Eurozone.

''The ball is in China's court,'' De Gucht said referring to negotiations expected over the next two months. He added, the period of the lower tariff ''is a window of opportunity of 60 days,'' cautioning that windows ''could also shut.''

De Gucht had warned of such action last week to defend the credibility of EU trade rules. However pressure had been mounting on him to back off.

During his visit last week Prime minister Li Keqiang of China persuaded chancellor Angela Merkel to call for further negotiations. Given that China was a big export market for many German products, and Merkel was not eager to set off a Chinese-European trade war.

On Monday evening, Li bypassed De Gucht, in a phone conversation with the European Commission president, José Manuel Barroso.

He told Barroso that China was ready to retaliate if the EU took action. According to Xinhua, the official Chinese news agency, Li had warned Barroso that ''there would be no winners in a trade war.''

Solar panels account for over 6 per cent of China's exports to Europe, which made them one of the largest Chinese exports to the EU. In 2011, Chinese exports of panels and their main components to the EU stood at around €21 billion ($27.4 billion).

He added the action was an emergency measure to give lifesaving oxygen to a business sector in Europe that was suffering badly from this dumping.