China filed a World Trade Organization complaint against the U.S. on Tuesday over what it says are discriminatory requirements for electric vehicle subsidies.
The Chinese Commerce Ministry didn’t say what prompted the move. But under a new U.S. rule that took effect Jan. 1, electric car buyers are not eligible for tax credits of $3,750 to $7,500 if critical minerals or other battery components were made by Chinese, Russian, North Korean or Iranian companies. The credits are part of U.S. President Joe Biden’s signature climate legislation, named the 2022 Inflation Reduction Act.
A ministry statement didn’t mention the specific restriction. It said, though, that under the act and its implementing rules, the U.S. had formulated discriminatory subsidy policies for new energy vehicles in the name of responding to climate change. It said the U.S. move excluded Chinese products, distorted fair competition and disrupted the global supply chain for new energy vehicles.
Member countries of the Geneva-based WTO can file complaints about the trade practices of other members and seek relief through a dispute settlement process.