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Chinese Solar Panels Saturating the Market, Trade War Approaching

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Solar PanelsFollowing allegations that Chinese solar panel manufacturers have been unloading their product overseas for lower prices than at home, or even under cost. This is fairly typical for the rising economic power of the world, but it has begun to strain trade relations with their partners in the United States [US] and European Union [EU]. Recently, the US began to impose import taxes on Chinese solar products, and now the EU is investigating.

“Industries in the United States and Europe are becoming increasingly aware there is much more evidence of subsidies in China,” said an EU official involved in the investigation. “But this is not a purely adversarial process. We have said to the Chinese government that we are open to finding a solution.”

Currently, the US is the EU’s second-biggest trade partner, after China, and a trade war would be catastrophic for everyone involved. There seems to be a lot of evidence in the Chinese government pushing down prices with billions of dollars in cheap credit lines.

On the other side, the Chinese solar panel manufacturers complained of EU members favoring domestic solar panel production and even threatening to tax polysilicon exports, the main raw material for solar panel production.

China has protested against the US tarriffs on billions of dollars of Chinese solar panels over the next five years. “The decision has seriously distorted the situation of the Chinese solar energy industry and the exports of the Chinese solar energy products to the US,” China’s Chamber of Commerce for Import and Export of Machinery and Electronic Products said. The EU might be taking similar measures within the next year, unless a compromise can be reached.

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