• Tue. Jun 18th, 2024

China’s Challenge to US Electric Vehicle Subsidy Policies: A Case of Global Trade Tensions

BySamantha Johnson

Mar 27, 2024
China to oppose Biden’s electric vehicle initiatives at the WTO

The United States has been hit with a complaint from China over what it sees as discriminatory requirements for electric vehicle subsidies. In response to a new U.S. rule that came into effect on January 1, electric car buyers in the U.S. are no longer eligible for tax credits if critical minerals or other battery components were made by Chinese, Russian, North Korean, or Iranian companies. This rule is part of President Joe Biden’s 2022 Inflation Reduction Act, which aims to address climate change.

The Chinese Commerce Ministry has not specified what prompted the complaint but has expressed concerns about the U.S.’s discriminatory subsidy policies for new energy vehicles under the act. The Ministry believes that these policies exclude Chinese products and distort fair competition, disrupting the global supply chain for new energy vehicles. Member countries of the World Trade Organization (WTO) can file complaints about each other’s trade practices and seek relief through a dispute settlement process.

The real-world impact of this case is uncertain given that if the United States were to lose and appeal the ruling, China’s case would likely not progress due to the WTO’s Appellate Body not functioning since late 2019. China is a dominant player in the battery market for electric vehicles and has an expanding auto industry that could challenge established carmakers globally. The European Union has also expressed concerns about Chinese subsidies for electric vehicles under this new U.S rule only 13 out of over 50 EV models on sale in the U.S were eligible for tax credits, prompting automakers to source eligible parts to qualify for the credits.

Overall, this dispute highlights tensions between major trading powers and could have broader implications for global trade and geopolitics

By Samantha Johnson

As a dedicated content writer at newsanguinely.com, I weave words into compelling stories that captivate and inform our readers. With a passion for storytelling and a keen eye for detail, I craft engaging articles that shed light on the latest news and trends. When I'm not typing away at my keyboard, you can find me exploring new ideas, researching diverse topics, and striving to deliver content that resonates with our audience. Join me on this journey as we uncover the stories that matter most.

Leave a Reply