The EU is ready for war over excise taxes on Chinese solar panels

Commissioner De Gucht wants to impose a 30% tax on solar panels from Beijing Slashed prices of Asian products stifle German and community production

The EU prepares for war against China but fortunately it is not an armed conflict but rather a skirmish of tax strikes.  The culprit – the Chinese exportation of solar panels are putting the EU market, above all the Germans, the continental leader, and the Italians out of business. According to sources at Reuters, Karel De Gucht, Commissioner for Trade, at Wednesday’s College of Commissioners meeting will propose studing measures to introduce a tax in excess of 30% on importation beginning already this summer. This very strong measure would certainly create friction with Beijing, an important commercial partner for the EU.

Last year the Commission began 2 inquiries on imports of Chinese solar panels, the largest in terms of investments never put to use. The accusation against the Asian government is that they violate the competition guidelines using aid from illegal states. The volume of solar panel material imported from China in 2011 was about 21 billion Euro; the Chinese production quadrupled between 2009 and 2011 and according to EU manufacturers, they captured about 80% if the community market. This humiliating defeat for the Union that represented ½ of the entire world solar panel market last year with a business of 77 billion dollars, according to the assessment of the research company IHS.

And without imposing high excise taxes it is impossible to stop the import of product that arrives at prices at least 45% lower than those produced locally, due to a frightening over-production caused, according to the prosecution, public grants which pushed production to exceed more than 20 times the level of consumers in their country. But even in the Union, there is no lack of criticism about the Commission’s plan. It’s business groups that represent customers who buy solar panels in six member states of the EU and have already sent an open letter to De Gucht asking him not to introduce the excise taxes. According to them this could bring about many cancelled orders and a tightening of use of these renewable funds that thanks to the low prices are finally spreading in a much more consistent manner.