China and the EU Clash Over Solar Power... Retaliation Threatened Over Anti-Subsidy Investigation

by Jeong Donghoon

Published 09 Jan.2025 17:46(KST)

Reference photo

The Chinese government has concluded that the European Union's (EU) anti-subsidy investigation targeting Chinese-made solar and wind products constitutes a "trade barrier" and hinted at the possibility of retaliatory trade measures.

On the 9th, the Chinese Ministry of Commerce announced that it had completed the EU's investigation, which began in July last year to determine whether there were trade barriers, stating, "We recognize that the measures taken by the EU in investigating Chinese companies under the Foreign Subsidies Regulation (FSR) and its implementing rules constitute trade and investment barriers."

This investigation was initiated by the China Chamber of Commerce for Import and Export of Machinery and Electronic Products in June last year, amid escalating trade tensions between China and the EU, after the EU decided to impose countervailing duties on Chinese electric vehicles, citing unfair subsidies.

The Chinese Ministry of Commerce announced the start of the investigation a month later, stating that the industries of the Chinese companies requesting the trade barrier investigation were related to products such as railway locomotives, solar power, wind power, and safety inspection equipment.

However, seemingly mindful of ongoing tariff negotiations on electric vehicles with the EU, the electric vehicle sector was excluded. The EU raised tariffs on imported Chinese electric vehicles from 10% to between 17.8% and 45.3% starting late October that year, and the negotiations between the two sides have yet to conclude.

With the Chinese Ministry of Commerce officially defining the EU's investigation into machinery and equipment such as solar and wind power as a trade barrier, the cards for retaliatory measures against the EU have increased.

China had already initiated an anti-dumping investigation on EU pork in June last year, an anti-subsidy investigation on dairy products in August, and began imposing provisional anti-dumping duties on EU brandy in November.

At a briefing on the same day, Chinese Ministry of Commerce spokesperson He Yadong said regarding the trade barrier determination, "The Ministry of Commerce verified the situations of various stakeholders through surveys and on-site investigations and widely solicited opinions. During the investigation process, the European Commission did not submit any responses or opinions," adding, "The Ministry of Commerce demands that the EU adjust and change the relevant measures to provide an open, fair, equitable, non-discriminatory, and predictable environment for Chinese companies' investment and operations in the EU."