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The European Union has announced its decision of imposing anti-dumping levies on imports of Chinese solar panels.
Eighteen EU member countries had opposed the move.
A punitive tariff of about 12 per cent would be levied on the import of solar panels, cells and wafers this week, EU trade commissioner Karel De Gucht announced on Tuesday.
That will increase to an average of 47 per cent in August unless a settlement is reached with China in the next 60 days.
According to EU calculations, a fair sale price for Chinese solar panels should be 88 per cent higher than what they are currently being sold for.
Wang Liusheng, an analyst with China Merchants Securities Co Ltd, said that although the current rate set by the commission leaves some room for negotiation, a great deal of damage has already been done to Chinese solar companies whose major market is in Europe.
China may draw up similar anti-dumping plans against polysilicon materials from Europe, which will push up the price and benefit Chinese silicon material companies in the short term.
But he added that if a trade war broke out, both sides would lose out.
Several major Chinese solar companies saw their shares plunge on Wednesday. Shanghai-listed Hareon Solar Technology Co Ltd, a leading manufacturer of solar modules, slumped by 3.21 per cent to 6.93 yuan ($1.13).
In an opinion poll carried out prior to the preliminary ruling, a total of 18 EU members, including Belgium, Germany and the United Kingdom, opposed the commission’s plan to impose hefty tariffs on solar products imported from China.
With inputs from Xinhua