The vehicles are scheduled to be shipped to Europe at Taicang Port on December 19, 2022, in Suzhou, China.
Vcg | Visual China Group | Getty Images
China has initiated dispute settlement proceedings against the United States on the World Trade Organization to guard its interests within the electric vehicle industry, the Chinese mission said on Tuesday and the WTO confirmed.
China said it was difficult “discriminatory subsidies” under the US Inflation Reduction Act (IRA) that it said led to the exclusion of products from China and other WTO countries.
The sweeping law provides multibillion-dollar tax breaks to assist consumers buy electric vehicles and businesses produce renewable energy as President Joe Biden goals to decarbonize the large U.S. energy sector.
“Under the guise of responding to climate change, reducing carbon emissions and protecting the environment, (these subsidies) are in fact contingent on the purchase and use of goods from the United States or imported from specific regions,” the Chinese mission said.
It said it was initiating the proceedings “to protect the legitimate interests of China’s electric vehicle industry and maintain fair, equal conditions of competition in the global market.”
U.S. Trade Representative Katherine Tai said Washington was considering China’s request for WTO consultations “on portions of the Inflation Control Act of 2022 and its implementing measures.”
In an announcement, Tai said the IRA helps contribute to “the clean energy future we are seeking together with our allies and partners.” She accused China of using what she called “unfair, non-market policies” to learn Chinese producers.
A WTO official confirmed that China’s request for consultations on the dispute had been received, without providing details.
In Beijing, a spokesman for China’s Ministry of Commerce said it was calling on Washington to “immediately correct discriminatory industrial policies and maintain the stability of global industrial chains and the supply of new energy vehicles.”
WTO rulings on trade disputes should take six months from the establishment of the adjudicating panel, but this often takes longer.
If the WTO rules in China’s favor, Washington will at all times give you the chance to appeal the choice, making a legal vacuum that has existed since December 2019, when the WTO’s top appellate bench ceased to operate as a result of U.S. opposition to judicial nominations.
The United States is asking for reforms of the Appellate Body, which it accuses of overreach, and negotiations are ongoing but face many obstacles.