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28th May 2022

China retaliates in EU trade dispute

  • China is targeting EU wine imports in a tit-for-tat move (Photo: Derek Gavey)

China on Wednesday (5 June) hit back at Europe targeting wine imports in a tit-for-tat move over the EU commission's decision to impose anti-dumping tariffs on Chinese solar panels.

Beijing said it launched an anti-dumping and anti-subsidy probe into European wine imports, a move mainly hitting France, Spain and Italy, but sparing Germany who was vocal in opposing the solar panel tariffs.

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The EU commission decided to introduce a 11.8 percent import levy on Chinese solar panels starting from Thursday, in what it called a "clear case" of dumping that is damaging the European solar industry.

French President Francois Hollande has demanded for a special summit to be organised to solve the trade dispute, with his trade minister calling the Chinese wine move "inappropriate and reprehensible."

But commission chief Jose Manuel Barroso on Wednesday rejected the idea. "I don't think it makes sense to have a European Council related to a specific issue of trade," he said.

German economy minister Philipp Roesler meanwhile repeated calls for a compromise.

"The EU must always negotiate and I think there's still the chance to quickly sit at the table and agree on a fair framework and definitely avoid a trade war that would affect many more areas than the photovoltaic sector," he told German television.

In recession-hit Spain, wine makers warn that if the Chinese put import tariffs on their product, it will further damage the frail economy.

"The saddest thing about all this is that if proceedings are opened and anti-dumping measures such as import tariffs applied, it means a sector that is doing really well will be dragged into a trade war that has nothing to do with it," a representative of the Spanish Wine Federation said.

According to commission figures, China bought €763 million worth of wine from Europe last year, of which €546 million came from France, €89 million from Spain and €77 million from Italy.

A commission spokesman said there is no data on their side to support the Chinese investigation. "We do not believe that there is any such dumping or subsidies when it comes to the export of wine to China," he said.

Meanwhile, official Chinese media in Beijing warned that more probes were to come after the EU imposed tariffs on solar panel imports.

"The probe into wine imports could be followed by more moves if the EU continues to ignore China's interests," the China Daily said, urging the Chinese government to show "more teeth."

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