China-EU Trade Spat II: The Wine Wars

(TheDiplomat) - Given the strong national-level political pressure emanating from various European capitals (especially Berlin) and the slightly threatening rumblings from Beijing in no small part driving them, it was always going to be difficult for EU Trade Commissioner De Gucht to impose punitive tariffs on Chinese photo-voltaic  (PV) cells (“solar panels” in more common parlance). Indeed, recent events include both a step back on the part of the EU, and “turning of the screws” style escalation from China. Both developments deserve a bit of attention.

First, the European Union’s “temporary reprieve” on the duties has not been an outright delay of their imposition, but rather the introduction of a much lower 11.8% duty for the first two months, a time period that has now become another effective deadline for the two sides to reach a negotiated settlement. Many European national governments had publically opposed the duties, and the compromise reflects this reality quite neatly. The most significant opponents of the proposed anti-dumping duties on China were Germany and the United Kingdom, whilst both France and Italy gave their support to De Gucht.

Ever the savvy negotiator, China’s Ministry of Commerce responded with lukewarm welcome to the EU’s olive branch, but then in the same statement announced that it was beginning an investigation into dumping of European wine into Chinese markets.