China Files WTO Complaint Against the US Over Alleged ‘Discriminatory’ EV Subsidies
Written by Deborah Oyinloye on March 27, 2024
China has launched dispute settlement proceedings against the United States at the World Trade Organisation (WTO), challenging what it describes as ‘discriminatory subsidies’ in the U.S. electric vehicle (EV) industry. The complaint focuses on the United States Inflation Reduction Act, which China claims has unfairly excluded goods from China and other WTO member countries from benefiting from the subsidies.
The U.S. Reduction Act offers substantial tax credits to consumers purchasing electric vehicles and supports companies in producing renewable energy, aligning with President Joe Biden’s efforts to transition the U.S. power sector towards decarbonization.
The Chinese mission at the WTO stated, “Under the disguise of responding to climate change, reducing carbon emission, and protecting the environment, these subsidies are in fact contingent upon the purchase and use of goods from the United States or imported from certain particular regions.”
The mission emphasized that China’s decision to initiate proceedings aims to protect the legitimate interests of its electric vehicle industry and ensure fair competition in the global market.
In response to China’s complaint, a WTO official confirmed the receipt of China’s request for dispute consultations. Meanwhile, China’s Ministry of Commerce urged the U.S. to correct its allegedly discriminatory industrial policies and maintain global industrial and supply chain stability for new energy vehicles.
As of now, there has been no immediate response from the U.S. Trade Representative’s Office in Washington regarding China’s complaint.
WTO trade dispute rulings typically take around six months after the establishment of an adjudication panel, although delays are not uncommon. If the WTO rules in favour of China, the U.S. could potentially appeal the decision, taking advantage of a legal void that has been in place since December 2019 when the WTO’s top appeals bench ceased functioning due to U.S. opposition to judge appointments.
The United States has been advocating for reforms to the WTO’s Appellate Body, accusing it of overreach. However, negotiations for these reforms are facing numerous obstacles.
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Author: Deborah Oyinloye
With an interest in media, Deborah aims to impart the lives of people positively.
