Crisis, averted: EU and China manage to avoid a solar-powered trade war

posted at 1:01 pm on July 27, 2013 by Erika Johnsen

Over the past few months, the European Union and China have been in a bit of a tiff over their mutual involvement in the global solar-panel trade. Europe’s been feeling mighty upset that China has been in the habit of dumping cheap solar panels into the European market and royally messing things up for Europe’s domestic solar manufacturers, because China so heavily subsidizes their own solar industry that their producers are able to sell their panels at below-market prices. Ergo, the European Union threatened to impose duties on imported solar panels, and then the Chinese got ticked off, and then China threatened to impose tariffs on European wine imports — anyway, it was bad.

But, lo and behold — compromise, via the WSJ:

The European Union and China have reached an agreement on a multi-billion dollar trade dispute over solar panels, the EU said Saturday, bringing an end to weeks of fierce negotiations.

“I can announce today that I am satisfied with the offer of a price undertaking submitted by China’s solar panel exporters, as foreseen by the EU’s trade defense legislation. This is the amicable solution that both the EU and China were looking for,” said EU Trade Commissioner Karel De Gucht in a statement.

A price undertaking is a measure taken by an exporter to raise the price of a product in order to avoid anti-dumping duties.

The disagreement, which had threatened a broader trade war, involved EU import tariffs on China’s solar-panel equipment. Tariffs of nearly 48% had been set to start Aug. 6, the date the European Commission, the EU’s executive arm, set for the new tariffs to take effect.

The whole saga, of course, is pretty ridiculous, because what the EU and China were really fighting over is their race to see who can out-subsidize the other on the green energy front the fastest. Despite the EU’s accusations, plenty of EU countries have offered all kinds of shameless special treatment to their domestic solar industries, anywhere from direct subsidies and loan guarantees to tax credits and renewable quotas. Neither body has at all managed to build a healthy market; the solar industry still very much lives and dies but how much government assistance they receive.

It’s the same reason I’ve often scoffed whenever President Obama talks about needing to make the appropriate “investments” to make sure that China doesn’t get ahead of us and win the green-energy game, and that they somehow subsidize the solar industry but what he deems to be too much. Like we have room to talk.


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I have a slot blog. Out soon. ; )

Bmore on July 27, 2013 at 1:10 PM

I have a solar blog. Out soon. ; )

Bmore on July 27, 2013 at 1:11 PM

Dang iPad thingy!

Bmore on July 27, 2013 at 1:11 PM

So the two cronies compromised? I can’t contain my joy!

aryeung on July 27, 2013 at 1:16 PM

China wins this one. Just wait.

FlaMurph on July 27, 2013 at 1:21 PM

What have europeans got against China blowing its own money to sell them cheaper solar panels?

DarkCurrent on July 27, 2013 at 1:26 PM

What have europeans got against China blowing its own money to sell them cheaper solar panels?

DarkCurrent on July 27, 2013 at 1:26 PM

The EUs have influential (read political donors ) business people who want to make and sell solar stuff.

Most industries the Chinese have pirated were marginal and not so well connected.

IlikedAUH2O on July 27, 2013 at 1:38 PM

China wins this one. Just wait.

FlaMurph on July 27, 2013 at 1:21 PM

.
Should we (the U.S.) be mad, glad, or indifferent about this?

I’m honestly not certain.

listens2glenn on July 27, 2013 at 1:39 PM

Basically what they accomplished was making sure that we in America do not get the lowest prices out of China on these things…

astonerii on July 27, 2013 at 1:44 PM

Btw, VPN still working fine Erika :)

DarkCurrent on July 27, 2013 at 1:48 PM

Should we (the U.S.) be mad, glad, or indifferent about this?

I’m honestly not certain.

listens2glenn on July 27, 2013 at 1:39 PM

We should glad that the EU and China didn’t have a trade war. It would make us poorer. If we could only get these two to support capitalism, we would be richer.

thuja on July 27, 2013 at 1:51 PM

“What have europeans got against China blowing its own money to sell them cheaper solar panels?”

The reality here is that the only reason anyone manufactures these things is because the Euro governments has been massively subsidizing their installation. So, China built plants, and subsidized them, in order to get Euro tax subsidies. The Eurocrats are paying the Chinese to sell their citizens useless junk, that sits on rooftops in the rain.

Cation on July 27, 2013 at 2:36 PM

A fight over who can waste the most money on an inefficient technology. Perfect. Actually, China’s just taking advantage of the phony market created by western fools and crooks.

RadClown on July 27, 2013 at 2:40 PM

Sometimes you have to step back and examine the layers of stupid.

1) The Euros tax themselves silly to build out a technology ill suited any country north of Spain.
2). The Europeans then discourage anyone from selling the technology that will bring the cost to protect high cost domestic producers.
3) The Euros are then saddled with high cost energy, weakening their industrial base and their ability to pay said subsidies.

johnboy on July 27, 2013 at 3:14 PM

If the Chinese are willing to help lower the cost through subsidies at their end, more power to us-literally. We should be buying the below cost panels as quickly as they can make them.

When you can buy a product below cost, it’s time to stock up.

MarkT on July 28, 2013 at 11:17 AM