EU poised to impose anti-dumping levies on China

Associated Press

BERLIN (AP) — The European Union is set to announce anti-dumping levies on Chinese solar panels, an official said Tuesday, in a move that could trigger a trade war between two of the world's largest economies.

China is the world's largest producer of solar panels and is accused by the EU of selling them below cost to corner the market. Its exports to Europe totaled 21 billion euros ($27.5 billion) in 2011.

The EU official said Trade Commissioner Karel de Gucht will announce the tariffs later Tuesday. He spoke only on condition of anonymity because he was not authorized to discuss the deal before the official announcement.

The EU Commission, the bloc's executive arm that deals with antitrust issues, confirmed de Gucht will present the outcome of an investigation but declined to elaborate. Pending completion of the probe, the Commission had proposed a 47 percent special duty on the Chinese solar panels.

The trade row between the EU and China, the world's number one and number three economies, is the biggest anti-dumping case in history by sales volume, according to the EU official.

The duties would take immediate effect but over the next six months the Commission will negotiate with China to reach a settlement — which could involve Beijing agreeing to sell its solar panel at a higher price.

If a settlement can't be reached, Brussels will propose making the anti-dumping tariffs permanent, a move that would require approval by a majority of the EU's 27 member states.

The global solar panel market is suffering from overcapacity, which has led to stiff competition that has forced several European manufacturers out of business.

Still, several EU nations, including heavyweight Germany, have spoken out against imposing special duties and urged the Commission to reach a settlement with China.

Germany has the bloc's biggest solar industry, but Berlin fears imposing special duties could provoke Chinese retaliation on imports of European goods which, in turn, would harm German exporters.

China rejects the EU's price-dumping allegations, but the problem is not new for Beijing. The U.S. last year imposed punitive tariffs on solar panel imports after finding that China's government was subsidizing companies that were flooding the U.S. market.

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