Europe just fired the first shot in what could become a costly trade war with China.
The European Commission confirmed Tuesday it will impose provisional tariffs on solar panels imported from China, accusing subsidized exporters of flooding the EU at prices way below production cost.
"Our action today is an emergency measure to give life-saving oxygen to a business sector in Europe that is suffering badly from this dumping," said EU Trade Commissioner Karel de Gucht. He said the fair price of a solar panel from China would be 88% higher than the current price.
A tariff of 11.8% will apply to all Chinese solar panel imports starting June 6, and that will rise to an average of 47.6% two months later, creating what the EU hopes will be a window for further negotiations with China.