China Retaliates to EU’s Solar Panel Tariffs with Probe into European Winemakers

It was already suggested that the EU risked an all-out trade war with China after it decided to impose import tariffs on Chinese solar panels, but now that trade war may have actually begun. China has turned around and stated that it will launch an investigation into rumours that European winemakers are selling their wines at uncompetitive prices via dumping, and the use of subsidies; basically the same claims that the EU is making against Chinese solar manufacturers.

Beijing will launch an anti-dumping and anti-subsidy probe that will mainly affect the southern European countries such as France, Italy, and Spain, more than northern neighbours, such as Germany.

Beijing is clearly retaliating to the EU's import tariffs. The Chinese Commerce Ministry claimed that the EU "obstinately imposed unfair duties on Chinese imports of solar panels," despite the fact that they were making great efforts to try and resolve the solar dispute with serious talks.

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Philipp Roesler, the German Economics Minister, said that "the EU must always negotiate and I think there's still the chance to quickly sit at the table and agree on a fair framework and definitely avoid a trade war that would affect many more areas than the photovoltaic sector."

Officials in Beijing explained that the probe into EU winemakers was made at the request of Chinese winemakers. "The Commerce Ministry has already received an application from the domestic wine industry, which accuses wines imported from Europe of entering China's market by use of unfair trade tactics such as dumping and subsidies.

We have noted the quick rise in wine imports from the EU in recent years, and we will handle the investigation in accordance with the law."

Chinese exports to the EU totalled around 290 billion euros in 2012, and exports from the EU to China were valued at 144 billion. Whilst wine is only a small fraction of the trade between the two economic giants, further retaliation from either side could lead to a more tit-for-tat actions that lead to an all out trade war.

By. James Burgess of Oilprice.com