China to oppose Biden’s electric vehicle agenda at the WTO

China accused the US of discriminatory requirements for electric vehicle subsidies in a complaint filed with the World Trade Organization (WTO) on Tuesday. The Chinese Commerce Ministry did not specify what prompted this move, but it cited a new US rule that came into effect on January 1st, which states that electric car buyers cannot receive tax credits of $3,750 to $7,500 if critical minerals or other battery components were manufactured by companies from China, Russia, North Korea, or Iran.

The Chinese Ministry stated that the US has formulated discriminatory subsidy policies for new energy vehicles under the 2022 Inflation Reduction Act. These policies exclude Chinese products, distort fair competition and disrupt global supply chains for new energy vehicles. The European Union has also raised concerns about Chinese subsidies for electric vehicles.

If the US loses and appeals the ruling, the case may not progress due to the WTO’s Appellate Body not functioning since 2019. The impact of this case remains uncertain. However, China is a dominant player in the electric vehicle battery industry and has a growing auto industry that could challenge established carmakers globally. This new US rule has led to only 13 out of over 50 electric vehicle models sold in the US being eligible for tax credits, forcing automakers to scramble to source parts that meet these requirements.

By Riley Johnson

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