The ‘solar panel war’ between the European Union and China escalated this week when the EU placed an 11.7% tariff on imports of Chinese solar panels. The move is intended to counteract what the EU sees as Beijing’s unfairly ‘dumping’ government-subsidised solar panels in Europe, thus driving local producers out of business. The commissioner had originally threatened a 47.6% tariff, but was persuaded to cut it back by EU members, such as Germany, who are unwilling to spark a trade war with China. However, the Chinese, for whom solar panels make up 6% of exports to the EU, have already responded by launching a subsidy probe into Europe’s wine industry.
What the commentators said:
The decision points to the bizarreness of Europe’s decision-making process, says Liu Jie in The People’s Daily. “A majority of the 27-nation bloc voted against the duties.” Yet it went ahead, demonstrating that the “obstinacy of the European Commission” overrides members’ wishes.
European commissioner for trade, Karel de Gucht, may have felt he had no choice, says The New York Times. “Individual Western firms, in the solar industry and other sectors, have been wary of taking any public stance against China, which has become the world’s largest market in [many] industries.” Most European countries are also wary of provoking China’s ire – especially when its huge domestic market remains one of the few hopes for their depressed exporters.
Solar subsidies are no reason to start a trade war, says Kevin Allison on Reuters Breakingviews. “Western manufacturers probably exaggerate the impact of cheap Chinese kit.” It’s also disingenuous to blame falling solar panel prices on the Chinese. “Falling production costs account for most of the 80% price decline” since the start of 2010. Tariffs will make solar energy less competitive, helping rival forms of energy.