China filed a World Trade Organization complaint against the U.S. on Tuesday over what it says are discriminatory requirements for electric vehicles subsidies. Starting this year, U.S. car buyers are not eligible for tax credits of $3,750 to $7,500 if critical minerals or other battery components were made by Chinese, Russian, North Korean or Iranian companies. The credits are part of U.S. President Joe Biden’s signature climate legislation, named the 2022 Inflation Reduction Act.
Quick Read
- WTO Complaint: China lodged a complaint with the World Trade Organization against the US, challenging what it considers discriminatory conditions tied to electric vehicle subsidies in the US.
- US Tax Credits for EVs: The US, under President Joe Biden’s 2022 Inflation Reduction Act, offers tax credits for electric vehicle purchases, but with stipulations that exclude vehicles using materials from China, Russia, North Korea, or Iran.
- China’s Position: The Chinese Commerce Ministry criticized the US for promoting discriminatory policies under the guise of climate change response, claiming these actions exclude Chinese products, distort competition, and disrupt the global supply chain for new energy vehicles.
- WTO Dispute Settlement: China’s complaint initiates a process within the WTO, allowing member nations to challenge each other’s trade practices and seek resolution through a structured dispute settlement mechanism.
- Global EV Market Dynamics: China, a dominant force in electric vehicle battery production and technology, faces challenges in the global market due to such policies, while the European Union has also expressed concerns over Chinese subsidies for electric vehicles, initiating its investigation.
- Impact on EV Eligibility: The implementation of the new US rules at the start of the year significantly reduced the number of electric vehicles eligible for tax credits, prompting automakers to adjust their supply chains to meet the new requirements.
The Associated Press has the story:
China to challenge Biden’s electric vehicle plans at the WTO
Newslooks- BEIJING (AP) —
China filed a World Trade Organization complaint against the U.S. on Tuesday over what it says are discriminatory requirements for electric vehicles subsidies. Starting this year, U.S. car buyers are not eligible for tax credits of $3,750 to $7,500 if critical minerals or other battery components were made by Chinese, Russian, North Korean or Iranian companies. The credits are part of U.S. President Joe Biden’s signature climate legislation, named the 2022 Inflation Reduction Act.
The Chinese Commerce Ministry said in a statement posted online that the U.S. formulated discriminatory subsidy policies for new energy vehicles in the name of responding to climate change. It said the U.S. move excluded Chinese products, distorted fair competition and disrupted the global supply chain for new energy vehicles.
Member countries of the Geneva-based WTO can file complaints about the trade practices of other members and seek relief through a dispute settlement process.
China is the dominant player in batteries for electric vehicles and has a rapidly expanding auto industry that could challenge the world’s established carmakers as it goes global. Its strength is in electric vehicles and its companies have become leaders in battery technology.
The European Union, concerned about the potential threat to its auto industry, launched its own investigation into Chinese subsides for electric vehicles last year.
Under new U.S. rules that took effect Jan. 1, only 13 of the more than 50 EVs on sale in the U.S. were eligible for tax credits, down from about two dozen models in 2023. Automakers have been scrambling to source parts that would make their models eligible for the credits.
