When the EU threatened to put into place punitive tariffs on solar components as well as the their related components, China retaliated with threats to do so as well on European wines and polysilicon benefiting from the huge Chinese market.

However, surprising everyone was the declaration of truce by the two sides on July 28. None of the threats from the two sides were imposed. The plans for the draconian tariff rates were scrapped. Instead of imposing the tariffs, the EU proposed to just restrict the market share that Chinese panels can enjoy. As a response, China also withheld plans of imposing punitive tariffs.

Economists, however, said that it is too early to say if the truce can end up in amicable trade relations between EU and China, or at least avert a trade war between the two companies completely. They stated this claim with reason, or reasons.

On the one hand, the European solar panel energy is not too happy with this deal, which priced the Chinese panels below the levels earlier proposed by the Commission when EU was still angered by the alleged Chinese dumping practices. In particular, EU ProSun, lobbied against this truce.

The European Commissioner for Trade, Karel de Gucht, was also angered by the fact that the Chinese solar case would have been huge under EU commission history, if not for the temporary truce between China and the EU.

The truce would probably not last as well considering the impending investigation of the large Chinese telecom giants. This investigation would only serve to undermine the truce. The Commission made it clear that the telecom giants, Huawei and ZTE, are not included in the talks on solar.