China has asked the World Trade Organization (WTO) to form an expert panel to help resolve a dispute over electric vehicle (EV) subsidies under the US Inflation Reduction Act (IRA), according to the country’s commerce ministry on Monday.
The world’s second-largest economy initiated the WTO dispute in late March after the Biden administration passed the IRA. This law offers billions of dollars in tax credits to encourage consumers to buy EVs and support companies producing renewable energy, as part of the White House’s efforts to decarbonize the US power sector.
China has been unable to find a resolution with the US through consultations to protect the rights and interests of its EV industry. As a result, China is advancing its case at the WTO.
- The IRA “excludes products from WTO members such as China, artificially sets trade barriers, and pushes up the costs of green energy transition,” China’s commerce ministry stated.
- “We urge the US to abide by WTO rules and stop abusing its industrial policies to undermine international cooperation on climate change,” China added.
IRA Key Provisions:
| Provision | Details |
|---|---|
| Consumer Tax Credits | Billions of dollars for buying EVs |
| Renewable Energy Production | Incentives for firms producing green energy |
| US Decarbonization Goal | Aim to reduce carbon emissions in power sector |
Featured Image courtesy of Automotive News
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