Reuters columnist: How to effectively avoid solar trade war

EU, U.S. and China is very likely to reach a low-priced Chinese solar products involving billions of dollars to resolve trade disputes. The European Commission and the U.S. Department of Commerce has said that China is far below the fair market value price selling solar panels and components, leading European and U.S. corporate bankruptcies. 2011, China's solar products sold in Europe and America worth over 30 billion U.S. dollars.

They said the Chinese government-backed investment boom caused severe overcapacity, and thus lead to dumping. Last week, the tripartite talks have begun, at least informally. Tariffs last year, the U.S. government announced that it would China's solar panels and batteries to impose anti-dumping and countervailing duties. Last week, the European Commission announced from China's solar panels, batteries and silicon impose provisional anti-dumping duties, and from August 6 onwards the tax rate will increase significantly.

European Commission will decide on August 5 provisional countervailing duties. Only make a final determination, these temporary tariffs will be imposed, and can move back three months. December 5, EU member states will have to make a final decision on these two tariffs. If the EU countries to support the final tariff, then they will be implemented up to five years.

However, it is unclear that they may make a decision. Trade diplomats said that the fear of Chinese retaliation, currently the majority of EU member states, led by Britain and Germany oppose tariffs.

Tariff prices will bring considerable impact. If PV module manufacturers reported, Chinese solar panels averagewholesale price is about $ 0.70 per watt. The United States has a major manufacturer in China of 30% levy definitive anti-dumping duty and countervailing duty of 15%. Since August, the EU decided to provisional anti-dumping duty will be increased to an average of 47.6%.

The implication is that the products imported from China will increase the price of nearly half, back to 2011 levels. Manufacturer's data show that last year China's top manufacturer of components average prices fell by 46%. Solar panels installed cost of the project the proportion of less than 50%, that the use of Chinese solar panels will increase the total project cost nearly 1/4.