Punitive tariffs on Chinese solar products to cost EU jobs

Punitive tariffs against imported Chinese solar products will lead to "very significant job losses" for the European Union (EU), a study by the independent economic institute Prognos showed Tuesday.

A punitive tariff of 60 percent against China's solar products would lead to 193,700 job losses in the EU during the first year of the tariff's imposition, according to the report.

The number of job losses would add up to 242,000 in the third year of the implementation of the punitive tariffs, said the report, commissioned by the Alliance for Affordable Solar Energy (AFASE).

Even a punitive tariff of 20 percent would cost 115,600 jobs in the EU during the first year after the implementation, and this would add up to 175,500 job losses until the third year.

The study, which was presented by Prognos at a hearing arranged by the AFASE held at the European Commission Monday, came after the Commission started anti-dumping and anti-subsidy probes last year against imported Chinese solar products.

The job losses would mainly happen to non-manufacturing sections of the whole value chain of the EU's photovoltaic (PV) industry.

The punitive tariffs cause a reduction in demand which is directly followed by a shrinking demand for installations and services in the industry, said the report.

"The potential positive impact of duties for the EU solar producers is dwarfed by the negative impact on employment in the EU," says Thorsten Preugschas, a spokesperson at AFASE, a coalition of over 180 companies in the European PV industry.

The jobs created by the EU solar producers as a result of the punitive tariffs against China "represent at the very most 20 percent of the jobs lost along the PV value chain," said Preugschas, also the CEO of the German project developer Soventix.

The study showed that the EU economy would also suffer in terms of value as EU's export to China of "intermediate inputs" -- including raw materials, components and production equipments in the manufacturing of solar products -- would decrease.

The value-added loss would reach up to 4.74 billion euros (6.35 billion U.S. dollars) in the first year and hit 18.4 billion euros during three years with a tariff of 20 percent, the research showed.

As the punitive tariff reaches 60 percent, the total loss of value added would amount to 7.86 billion euros during the first year after the implementation, and 27.2 billion euros of value added would be at stake over three years. (1 euro = 1.34 U.S. dollars)