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China, European Union risk trade war, observers say

June 7, 2013 at 11:14 AM   |   Comments

BEIJING, June 7 (UPI) -- Industries in China and the European Union are getting caught up in a trade dispute that could mean new or increased tariffs on their goods, observers said.

The European Commission said this week it will impose provisional tariffs on solar panels imported from China, a result of allegations of product-dumping on the European market at below-cost prices, CNN Money reported Friday.

Less than a day later, China said it was investigating wine imports from Europe. EU wine exports to China were worth about 763 million euros (about $1 billion) in 2012.

In May, the EU said it had enough evidence to launch an investigation into Chinese telecoms network suppliers.

Trade disputes aren't new but the sustained threats hint that tensions are high, CNN Money said. The chief concern is that new tariffs could lead to tit-for-tat retaliatory actions, which could mushroom into a trade war.

"You're going to have issues; that's just part of a large relationship," Jon Huntsman, former U.S. ambassador to China and Singapore, told CNN Money. "The real question becomes: Are we able to resolve these disputes without them festering and multiplying in terms of the cost and injury level to business?"

Former British Prime Minister Tony Blair said Thursday during the Fortune Global Forum that protectionism rarely is a good policy decision.

"These types of disputes are not unknown even between friendly nations," Blair said. "These things happen. We just have to get over them and resolve them."

© 2013 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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