In a retaliatory move against fresh EU punitive duties on Chinese solar panels, Beijing on Wednesday announced it will launch an anti-dumping and anti-subsidy probe against wine imported from the EU in a dramatic escalation of the widening trade dispute.
The decision comes a day after the European Union announced it would levy an initial average tariff of 11.8 percent on Chinese solar panel imports from Thursday, rising to 47.6 percent on August 6 in the absence of negotiations based on a Chinese commitment to address the problem.
The European Commission, the EU’s executive arm, argues that Chinese solar panels are being sold at up to 88 percent below cost in the European market and the alleged dumping was damaging competition from EU solar panel manufacturers.
The EU decision comes despite opposition from Germany and several other EU members that the levy could spark off an intense trade war with China.
China "firmly opposes" the EU move, said China’s Commerce Ministry, describing the duties as “unfair taxes” despite Beijing’s “great sincerity” and “enormous efforts in resolving the issue via dialogues and consultations.”
The ministry added that the Chinese government had begun an anti-dumping and anti-subsidy probe into EU wines at the request of Chinese wine manufacturers.
"The Commerce Ministry has already received an application from the domestic wine industry, which accuses wines imported from Europe of entering China's market by use of unfair trade tactics such as dumping and subsidies," it said in a statement.
China imported 430 million liters of wine last year, of which more than two-thirds came from the EU, according to Chinese customs figures. Imports from France alone came to 170 million liters.
Last month, the Chinese government had warned the EU that it would "take necessary steps" to defend its national interests, if any duties were levied against its goods.
On Wednesday, Xinhua, the official news agency, called the approval of the duties a “lose-lose blunder” that “points to the bizarreness of EU’s decision-making mechanism, or simply the obstinacy of the European Commission.”