Solar panels from China face 11% import tariff over dumping claims

Solar panels imported from China will face an 11 per cent tariff – instead of the 47 per cent tax proposed last month – as Brussels moves to avert a trade war with China.

But the European Commission warned that the lower tariff would revert to the higher rate of 47 per cent by early August, as it urged China to propose an “amicable solution” to the trade impasse.

The move comes after a number of countries – notably Germany – questioned the wisdom of imposing the heavy tariff on the Chinese imports. Following meetings with the new Chinese prime minister, Li Keqiang, in Berlin, German chancellor Angela Merkel pledged that Germany would do what it could to discourage the EU from imposing permanent import duties, saying it was something Germany did not believe in.

'Dumping' accusation
Last month, the commission announced plans to impose provisional duties on Chinese manufacturers of solar panels, following a nine-month inquiry, in one of the biggest trade cases of its kind. Brussels accuses China of selling solar panels to European markets at below cost, a process known as dumping.

“Chinese companies are dumping their underpriced solar panels on Europe,” EU trade commissioner Karel de Gucht said yesterday, adding that the import duties were an “emergency measure” to help the sector in Europe.

“Our estimate of the fair sale price of a Chinese solar panel would actually be 88 per cent higher than the current price for which they are sold on the European market.”

While stressing his preference for a negotiated solution, Mr de Gucht noted that there was now a two-month window for negotiation. “ [There is] a window of opportunity of 60 days . . . the window can open but it can also shut. [They] will have to come forward with undertakings,” the commissioner said.

Price undertakings
Mr de Gucht called on the Chinese authorities to provide a solution that would include price undertakings.

“It is the role of Chinese exporters and the Chinese chamber of commerce to now step forward with a solution that removes the injury to the European solar panel industry.”

The commission’s anti-dumping investigation looked at €21 billion of EU imports in 2011 of Chinese solar panel products. The commission is legally entitled to impose provisional duties on imported products, although the imposition of permanent duties needs the approval of member states.

Resistance from some member states to permanent tariffs on Chinese imports is believed to reflect national concerns about the impact any trade war would have on European exports to China.