The European Commission announced on  June 4th that it would impose provisional anti-dumping duties on Chinese solar panel products from June 6th to August 6th. If the two sides fail to reach an agreement on August 6th, the anti-dumping tax rate will rise to 47.6%. This temporary tax rate will remain for six months, until December, after which the Commission will decide whether to impose permanent tariffs on photovoltaic products made ​​in China. Once imposed, the tariffs would last for five years.

Chinese netizens are having heated discussions about this online. Some people are proposing that China should cancel its large order for the new Airbus. Even more people are saying that after the announcement from Chinese Ministry of Commerce on June 5th that the Chinese government has launched a Chinese anti-dumping investigation on wine imported from the EU, the second step of which will be an anti-dumping investigation on perfume and make-up products, followed by other luxury goods.

Apart from these proposals,  a widespread question is that if the EU has been actively promoting democracy in China, how is it possible for the European Commission to have made this decision with support from only 4 member states?

The European Commission’s anti-dumping levies involve photovoltaic products worth more than 200 billion dollars, not a small amount for either the EU or China. If a trade war could be avoided, it is a beneficial thing for both sides.

However, this peaceful solution is not likely to happen. Although China has been committed to use negotiation and consultation to resolve trade conflicts in the past, China should not hope for too much from the European Commission’s final decision in December. China needs to quickly turn the situation around, and focus on a “tit for tat” solution on the EU’s anti-dumping duties.