China and the EU launch anti-dumping probes against each other

China has launched a trade investigation into European wine exports in what is widely regarded as  retaliation against a proposed tariff increase by the European Union (EU) on Chinese solar-panels, escalating the dispute between the two trading powers.

The announcement from the Chinese government came after the EU offered a temporary lowering of tariffs on Chinese solar-panels while the two sides try to negotiate a solution.

The Chinese Ministry of Commerce welcomed negotiations over the solar market, but in the same statement added it was investigating anti-dumping measures and countervailing duties for European wine exports.  Dumping is the informal term given to products which are sold below cost of manufacture.

This comes as a blow to European exporters as China has the fastest growing wine market, currently the fifth largest, with the EU exporting €763 million worth of wine in 2012.

Many EU member states have opposed the tariffs on Chinese solar-panels. This was partly due to fear of provoking the Chinese into a trade war and partly due to a number of countries running programs to subsidise the cost of panels for installation on house roofs, who therefore have benefited from the cheaper Chinese panels. The largest and most successful of these programs is found within Germany, who have opposed the EU’s actions.

Peter Winnicki