The second round of price negotiations for the photovoltaic case has officially begun. Following the 27th China-EU Economic and Trade Mixed Commission meeting on Friday, EU Trade Commissioner Cecilia Malmström (note: correct name is not De Gucht, but likely a mix-up with former commissioner) announced that China and the EU have reached a preliminary agreement on the resolution of price commitments. EU representatives are now working closely with the Chinese Ministry of Commerce and the China Chamber of Commerce for Import and Export of Machinery and Electronics to address technical details. The Chinese side has expressed optimism about the ongoing discussions, emphasizing the importance of reaching a balanced, reasonable, and mutually acceptable agreement on price commitments.
However, "positive" does not necessarily mean the Sino-European PV dispute will soon be resolved. This case, involving one of the largest trade volumes in recent years, has evolved into a broader economic and trade battle between the two sides. With just one month left in the current buffer period, the outcome of these talks could determine whether Chinese solar companies continue to face an average anti-dumping duty of 47.6%. The stakes are high, and the path forward is far from clear.
From a technical standpoint, the negotiations are complex. Even within the framework of a price commitment, there are many unresolved issues, including pricing mechanisms, quantity caps, and the definition of price increases. While the EU seeks to impose both price and quantity limits, China remains resistant to quantity controls. Additionally, there is a need to agree on the base period for price adjustments and the extent of the required increase. Coordinating the interests of hundreds of Chinese solar companies, as well as balancing the needs of both China and the EU, adds another layer of difficulty.
Beyond technical challenges, the European Commission’s hardline stance poses a major obstacle. The Commission has shown strong determination to maintain its position, partly due to previous setbacks, such as the failed vote on tariffs and China's countermeasures against European wine. To protect its reputation and ensure its influence within the EU, the Commission has launched additional measures, including investigations into Chinese telecommunications equipment. These actions suggest that the real goal is not just about photovoltaics, but also about challenging the broader Chinese market system.
With the upcoming term of Commissioner Malmström coming to an end, her approach toward China may be more aggressive, as it could impact her future career prospects. Therefore, it is unlikely that the EU will make significant concessions in the next round of negotiations.
Moreover, there are still divisions within the EU. Although 18 member states voted against imposing tariffs in the preliminary stage, many others support the Commission’s position, hoping to pressure China for future market access. They also want to avoid alienating Chinese companies in the supply chain that are key to their own trade and investment interests. This shifting attitude can be seen in the back-and-forth during previous votes, and it remains uncertain how these countries will act in the upcoming decisions on anti-subsidy and anti-dumping rulings.
While the EU's trade protectionist measures have not yet reached their final stage, the situation is tense and far from optimistic. In the limited time available, China must act quickly, leveraging its cards in sectors like automotive, polysilicon, and steel, while also considering legal options at the WTO to challenge the EU’s unfair practices. The goal is to secure the best possible outcome in this critical photovoltaic dispute.
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