EU-China tensions set to rise as solar investigation imminent

The EU is to open a formal investigation into Chinese solar manufacturers, despite German Chancellor Angela Merkel’s statements last week urging a negotiation on the matter.

EU trade officials have indicated that they are constrained by the bloc’s laws, which require them to open an investigation if a complaint satisfies certain criteria.

Solar power panels

Trade officials will investigate whether or not the Chinese companies violated trade rules by dumping their products, or selling them below cost, on the EU market.

Depending on the outcome, it could result in punitive tariffs being imposed on the Chinese products, reports the FT.

Beijing has hinted that it could retaliate by launching probes into EU exports of polysilicon, the basic material used to construct photovoltaic cells.

There is division on the matter within the EU solar industry, with companies that install panels complaining that punishing Chinese imports would push up their costs and ultimately cost European jobs.

Merkel said in Beijing last week that she would prefer to see the issue resolved through dialogue, rather than investigation.

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