China Divides European Union in Fight Over Tariffs

NYTimes.com
Adroitly alternating the threat of a trade war with the lure of its huge import market, China appears to have driven a deep wedge between Germany and the rest of the European Union. (...) Ms. Merkel said Germany would lobby against duties on Chinese panels. As Chinese and European trade officials stare each other down over next week’s scheduled imposition of big tariffs on the $27 billion worth of solar panels China sells to Europe each year, Germany has come down on China’s side. Notably, Berlin is backing Beijing, even though Europe’s biggest producer of solar equipment, SolarWorld, is a German company that desperately wants the European Union to impose tariffs on the Chinese equipment. Unless the bloc backs off under German pressure, tariffs averaging nearly 50 percent would go into effect June 6, to punish China for the ostensible “dumping” of solar panels at below cost in Europe.
“Europe cannot succumb to blackmail — dumping is illegal, and the E.U. is obliged to defend itself by applying the international trade law,” said Milan Nitzschke, a spokesman for SolarWorld and the president of ProSun, a lobbying group for the European solar energy industry. But many other German companies, which rely more heavily than other European manufacturers on China as a significant market for their exports — whether Volkswagen cars or Siemens factory equipment or various other goods — fear that the dispute over solar panels could lead to an all-out trade war with China, which would be disastrous for their businesses. So far, the German government appears to agree.