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Last Updated:[10-06-2013 02:30:56 EDT] Zoom in Zoom out Back to Tradenews

Sweet Revenge- China Raises Price of European Wines to counteract the Solar Panel Incident

tradenews Whoever said that revenge is best served cold wasn’t obviously referring to the European made Champagnes, Burgundies and other fine wines that will soon be pricier for connoisseurs across China. This hard stance comes from the Chinese Ministry of Commerce as a direct retaliation for the European Union’s (EU) hard-line approach in imposing preliminary import tariffs on Chinese Solar Panels. Just to legitimize this move, the Chinese Ministry of Commerce will initially begin a trade investigation of the wines imported from the EU, followed by the imposition of steep tariffs.

The EU is very concerned about such a move from China. Mr. Karel De Gucht, EU’s Trade Commissioner had described China made Solar Panels as being ‘dumped’ throughout the EU- to offset local vendors and breed Chinese domination in this sector. While imposing a preliminary tariff of 11.8%, he described the Chinese move of selling Solar Panels at prices lesser than production costs as an elaborate ploy. Mr. Gucht hoping that such a steep tariff will discourage the unchecked trade of Chinese Solar Panels in the EU.

However, China- a growing Asian and Global economic power will not take such an imposition hands down. Citing ‘complaints from Chinese wineries’ as its ‘official’ reason- the Ministry of Commerce has vowed to conduct a thorough investigation of European wines with regards to improper duties or subsidies- a flimsy reason when considering the timing of such a response. Alongside this salvo, the ministry also took a direct pot-shot at the EU’s stepmotherly approach and promised to raise this issue for further debate with the utmost priority.

The EU cannot afford to jeopardise the Chinese market for European wine. Last year, $980.7 million worth of wine was exported to China by 27 countries of the European Union. However, the Chinese exports of Solar Panels to the EU stood at $27 billion last year. Clearly, a problem situation will financially affect China a lot more than the EU- thus, its retaliatory move drawing such a vocal response from the EU. The French trade ministry calling this Chinese move, “reprehensible.”

In the fast paced world of International trade, situations such as these are very common. Here’s hoping that good sense will prevail and this roadblock between China and the EU will be cleared through mutual dialogue.

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