China has initiated a new complaint at the World Trade Organisation (WTO) against subsidies granted by President Joe Biden to the US electric vehicle sector, citing unfair competition.
The world’s second-largest economy had opened a dispute with the WTO in March but due to failed negotiations with Washington, it has requested the “establishment of an expert group,” China’s Commerce Ministry announced.
Under Biden, Washington has sought to respond to Beijing’s subsidies to its industry and develop a green strategy. In 2022, it launched a massive aid programme, the Inflation Reduction Act, IRA, to support US-based companies in the energy transition and electric car sectors. This wide-ranging law provides billions of dollars in tax credits to help consumers buy electric vehicles and firms to produce renewable energy.
The IRA makes it a prerequisite for products to come from specific regions, such as the United States and excludes products from China, the Chinese Commerce Ministry remarked.
"No matter how one tries to package and polish this law, it cannot change its discriminatory, protectionist nature and the contravention of WTO rules inherent in the subsidies provided by this text," the ministry charged.
Beijing and Washington are already at loggerheads on a range of other trade issues, including tariffs, advanced technologies, and the social networking platform TikTok.
“We urge the United States to abide by WTO rules and stop abusing its industrial policies to undermine international cooperation on climate change,” the Chinese Commerce Ministry stressed on Monday.
Determined to curb China’s progression in the sector, the US had already announced in May the quadrupling of tariffs on imported Chinese electric vehicles, with economic competition with China central to the US presidential campaign.
For its part, the European Union (EU) in early July provisionally imposed additional tariffs of up to 38% on imported Chinese electric cars, whose prices, Brussels feels, are kept artificially low by state subsidies.
