This move is said to challenge an important content in the Inflation Reduction Act (IRA) - bearing the mark of US President Joe Biden's administration, according to Reuters. The IRA is a key initiative of President Biden's administration, offering tax incentives for the purchase of electric vehicles assembled in North America.
In a statement when submitting a complaint to the WTO on March 26.3, China's Ministry of Commerce alleged that the IRA and related regulations were "discriminatory" and "severely distorted" the global electric vehicle supply chain.
NIO ET5 electric car model at the showroom of NIO House (China) in Berlin, Germany on August 17.8.2023, XNUMX
The statement said Beijing is conducting legal proceedings against the US with the intention of protecting the legitimate interests of China's electric vehicle industry and maintaining a fair competitive playing field for the global market.
At the same time, a spokesperson for China's Ministry of Commerce called on the US to "quickly correct discriminatory industrial policies and maintain the stability of the global industrial and supply chain for vehicles." Use new energy".
Responding to this statement, US Trade Representative Katherine Tai said Washington is considering China's request for consultation at the WTO on parts of the 2022 IRA and measures to implement this law.
Ms. Katherine Tai said that the IRA is helping contribute to the clean energy future that the United States and its allies and partners seek. But Ms. Tai said that China uses phrases - what Ms. Tai describes as "unfair, non-market policies" - to give Chinese manufacturers an advantage.
A WTO official confirmed receiving a request for consultation on the dispute on the litigation issue from China but did not provide detailed information. WTO rulings on trade disputes are supposed to take six months after the panel is established, but the process often takes longer.
Commenting on the lawsuit, Mr. Bill Reinsch, senior advisor at the Center for Strategic and International Studies (CSIS-USA) commented: "I don't think China will win in this case. The rules on procurement and subsidies are so complex, I can see that the US is preparing to defend strongly."
According to Mr. Brad Setser, a former US trade official, the lawsuit is unlikely to force the US to change policy. In a thread on social network X, he predicted that China's case would be "appealed as invalid".
The electric vehicle sector is increasingly caught up in trade and geopolitical tensions as the world moves away from the internal combustion engine. China is said to be the dominant country in electric vehicle batteries and has a rapidly growing auto industry. This achievement could challenge the world's established automakers as the country reaches out to the global market.
Against this background, the European Union (EU) is concerned about the potential threat to the auto industry, so the bloc has opened its own investigation into China's subsidies for electric vehicles in 2023.
Additionally, starting this year, the US introduced a rule under the IRA that vehicles containing battery components or raw materials originating from “foreign companies” will not be eligible for credit. . These rules apply to companies headquartered in China, including subsidiaries of US corporations, as well as businesses elsewhere that are at least 25% owned by regulated entities. Chinese state support.
The US also applies similar regulations to companies from Iran, North Korea and Russia.
