Germany opposes EU tax on Chinese solar panels

Germany appears to be turning against a European tax on solar panels after Chancellor Merkel has indicated that he wants to avoid a trade war between the EU and China. Merkel said protectionism is ‘not the right answer in an open and global economy’.

The German chancellor said during a visit by Chinese Prime Minister Li Keqiang that she does not want to exaggerate the problems between the EU and China. Open trade issues between the two trading blocs should be resolved through mutual agreement, Merkel said writes Zeit Online.

The Chinese Prime Minister has traveled to the EU to discuss, among other things, an imminent European tax on Chinese solar panels. According to preliminary plans, this can rise to 47 percent. Europe is also considering opening an investigation into Chinese telecom companies Huawei and ZTE. Earlier this month, China threatened a trade war if the European Union goes through with the measures.

Now that Germany, as one of the most powerful EU members, seems to be turning against the levy and wanting to lobby the other members, the chances of the levy being introduced have diminished. However, the European Commission has the right to introduce the levy, as a temporary measure, without broad consensus among members.

The European Commission will make a provisional decision on 6 June. It may decide to introduce a temporary tax, to further investigate the alleged dumping of solar panels or to close the current investigation. If the investigation continues, a decision must be made on 5 December.