China has initiated a dispute settlement procedure against the United States at the World Trade Organization to safeguard its interests in the electric car industry, the Chinese mission said on Tuesday and the WTO confirmed.
China said it was contesting “discriminatory subsidies” under the US Inflation Reduction Act, 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 help companies produce renewable energy as President Joe Biden strives to decarbonize America’s powerful energy sector.
“Under the guise of responding to climate change, reducing carbon emissions and protecting the environment, these subsidies are in fact conditional on the purchase and use of goods from the United States, or imported from certain specific regions ,” the Chinese mission said.
It said it initiated the proceedings “to protect the legitimate interests of China’s electric car industry and maintain a level playing field for the global market.”
A WTO official confirmed that a request from China for dispute consultations on the issue had been received, without providing details.
In Beijing, a spokesperson for China’s Ministry of Commerce said it urged Washington to “immediately correct discriminatory industrial policies and maintain the stability of global industrial and supply chains for new energy vehicles.”
There was no immediate response from the US Bureau.
Trade Representative in Washington responded to a request for comment.
WTO rulings on trade disputes are supposed to last six months after an arbitration panel is established, but often take longer.
If the WTO rules in favor of China, Washington can always appeal that decision, as a legal gap has existed since December 2019, when the WTO’s highest appellate bench ceased to function because of the US. opposition to the appointment of judges.
The United States is calling for reforms to the Appellate Body, which it accuses of overreach. Negotiations are ongoing but face many obstacles.
First print: March 27, 2024 | 12:37 pm IST