By The Financial District
Apr 31 min
China has filed a World Trade Organization (WTO) complaint against the US over what it says are discriminatory requirements for electric vehicle (EV) subsidies, as reported by the Associated Press (AP).
Under a new US rule effective January 1, electric 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. I Photo: Great Wall Motor Facebook
The Chinese Commerce Ministry didn’t specify what prompted the move.
However, under a new US rule effective January 1, electric 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.
These credits are part of US President Joe Biden’s signature climate legislation, named the 2022 Inflation Reduction Act. The European Union (EU), concerned about the potential threat to its auto industry, launched its own investigation into Chinese subsidies for EVs last year.
The ministry argued that the US had formulated discriminatory subsidy policies for new vehicles under the act and its implementing rules. It claimed that this move excluded Chinese products, distorted fair competition, and disrupted the global supply chain.
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.
If the US loses and appeals the ruling, China’s case might face obstacles since the WTO’s Appellate Body, its supreme court, hasn’t functioned since late 2019 when the US blocked the appointment of new judges to the panel.