The European Commission imposed anti-dumping duties on imports of Chinese solar panels yesterday, defying German-led opposition and warnings from Beijing the move could spark a trade war.

European Union Trade Commissioner Karel de Gucht said the 27-nation bloc would impose an immediate tariff of around 12 percent on the import of panels, cells and wafers, increasing it to an average of 47 percent starting in August unless a settlement is reached with China.

China is the world's largest producer of solar panels and is accused by the EU of selling them below-cost to corner the market. Its exports of solar panels to Europe totaled 21 billion euros (US$27.4 billion) in 2011.

De Gucht said the price at which Chinese solar panels are sold in Europe should be 88 percent higher according to the commission's calculations. Chinese solar panels' market share in the EU has risen to 80 percent over recent years.

China rejects the EU's price-dumping allegations and Premier Li Keqiang warned last month that imposing punitive tariffs would hurt European consumers and could encourage trade protectionism. But he stopped short of threatening retaliation.

The commission, the bloc's executive arm, hopes to reach a settlement with China and has therefore taken a phased approach that leaves two months for intense negotiations before the special duties reach the punitive level of 47 percent.

"The ball is now in China's court," de Gucht said. "This is a one-time offer to the Chinese side to negotiate."

The trade row between the EU and China is the world's biggest anti-dumping case by sales volume, according to EU officials.

De Gucht added that to reach a settlement, Chinese manufacturers would have to agree to increase their prices and accept a lower market share quota.

"I would like to see an agreement. If we get it right it would be better for both sides," he said.

If a settlement can't be reached, permanent tariffs would require approval by a majority of the EU's 27 member states six months from now.

But several EU nations, including Germany, have spoken out against imposing special duties and urged the commission to reach a settlement.

Germany has led growing opposition to the move, winning the support of 17 other member nations including Britain. Berlin says the tariffs are not needed, stressing the wider trade relationship with China.

German Economy Minister Philipp Roesler said as the announcement was being made that it was "a serious mistake," with Berlin firmly opposed.

The case was initially brought by EU ProSun, which groups European solar panel makers who, they claim, have suffered most from Chinese imports.

But other companies in the solar energy industry relying on imported components from China have lobbied equally hard against tariffs.

"Any level of duties will severely hurt demand, causing job losses and dealing a massive blow to the European solar industry," the Alliance of Affordable Solar Energy said.