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File photo: U.S. President Joe Biden visits VDAB and tests the new Ford F-150 Lightning truck at the Ford Dearborn Development Center in Dearborn, Michigan, U.S., May 18, 2021. Photo: Leah Millis/REUTERS
BEIJING (AP) – China on Tuesday filed a World Trade Organization complaint against the United States over what it says are discriminatory requirements for electric vehicle subsidies.
China’s Ministry of Commerce has not disclosed what prompted the move. But new U.S. rules that went into effect on Jan. 1 mean electric car buyers can pay as little as $3,750 if critical minerals or other battery components are made by companies in China, Russia, North Korea or Iran. Not eligible for the $7,500 tax credit. The credits are part of US President Joe Biden’s signature climate bill, dubbed the Inflation Reduction Act of 2022.
The ministry’s statement did not mention any specific restrictions. However, based on the law and its implementing regulations, the United States said it had developed a discriminatory subsidy policy for new energy vehicles in the name of combating climate change. It argued that the U.S. measures excluded Chinese products, distorted fair competition, and disrupted the global supply chain for new energy vehicles.
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Members of the Geneva-based WTO can lodge complaints about the trade practices of other members and seek redress through the dispute resolution process.
The real-world impact of this incident is uncertain. If the US loses the case and appeals the ruling, China’s case is unlikely to be resolved. The WTO’s highest court, the Appellate Body, has not been functioning since late 2019, when the United States blocked the appointment of new judges.
China is a major player in electric vehicle batteries, with a rapidly expanding auto industry that could challenge the world’s established automakers as it globalizes. The company’s strength lies in electric vehicles, making the company a leader in battery technology.
The European Union launched its own investigation into China’s electric vehicle subsidies last year, concerned about the potential threat to its auto industry.
Under new U.S. rules, just 13 out of 50 or more EVs sold in the U.S. will qualify for tax credits, down from about 24 models in 2023. Automakers are scrambling to source parts to make their models eligible for tax credits. .
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File photo: U.S. President Joe Biden visits VDAB and tests the new Ford F-150 Lightning truck at the Ford Dearborn Development Center in Dearborn, Michigan, U.S., May 18, 2021. Photo: Leah Millis/REUTERS
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