China files dispute with WTO over U.S. electric car subsidies | Wilnesh News

China has launched dispute settlement procedures against the United States at the World Trade Organization to safeguard its interests in the electric vehicle industry, a Chinese delegation said on Tuesday, something the WTO also confirmed.

China said it was challenging “discriminatory subsidies” under the U.S. Inflation Reduction Act (IRA), which it said resulted in the exclusion of goods from China and other WTO countries.

The sweeping law provides billions of dollars in tax credits to help consumers buy electric vehicles and companies produce renewable energy, as President Joe Biden aims to decarbonize the powerful U.S. power industry.

“These subsidies, under the guise of combating climate change, reducing carbon emissions, and protecting the environment, actually depend on the purchase and use of imported goods from the United States or certain specific regions,” the Chinese delegation said.

The company said it initiated the lawsuit “to safeguard the legitimate interests of China’s electric vehicle industry and maintain a fair competitive environment in the global market.”

U.S. Trade Representative Catherine Tai said that Washington is reviewing China’s consultation request to the WTO “on portions of the Inflation Reduction Act of 2022 and its implementation measures.”

Day said in a statement that the IRA was contributing to “the clean energy future we seek together with our allies and partners.” She accused China of using what she called “unfair, non-market policies” to benefit Chinese manufacturers.

A WTO official confirmed it had received China’s request for dispute consultations on the matter, but did not provide details.

A spokesman for China’s Ministry of Commerce said in Beijing that it urged Washington to “immediately correct discriminatory industrial policies and maintain the stability of the global new energy vehicle industry chain and supply chain.”

WTO rulings on trade disputes are supposed to be completed within six months of the establishment of the adjudicating panel, but often take longer.

If the WTO rules in China’s favor, Washington can always appeal the decision, rendering the decision legally void since December 2019, when the WTO’s top appeals judge ceased functioning due to U.S. objections to the judge’s appointment.

The United States has called for reform of the Appellate Body, accusing it of overstepping its authority. Negotiations are ongoing but face many obstacles.