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

On Tuesday, China filed a complaint with the World Trade Organization against the United States, accusing it of having discriminatory requirements for electric vehicle subsidies. The Chinese Commerce Ministry did not specify what prompted this move, but it did mention that a new U.S. rule that went into effect on January 1 has been causing issues for Chinese companies in the electric vehicle industry.

The rule 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. According to the Chinese Ministry, this policy is discriminatory and distorts fair competition in the global market for new energy vehicles. The ministry also noted that this move could disrupt the global supply chain for these vehicles and harm Chinese companies’ competitiveness in the industry.

This case is significant as member countries of the WTO can file complaints against each other’s trade practices and seek relief through a dispute settlement process. However, the impact of this case remains uncertain due to the WTO’s Appellate Body not functioning since 2019. This means that if the U.S. loses and appeals the ruling, there may be no progress in resolving this case.

China is a dominant player in the electric vehicle battery industry and has a growing auto industry that could challenge established carmakers globally. The European Union has also raised concerns about Chinese subsidies for electric vehicles due to their potential impact on fair competition in Europe.

The new U.S. rule has already had an impact on American automakers who are scrambling to source parts that meet its requirements for tax credits eligibility for only 13 out of over 50 electric vehicle models sold in the U

By Samantha Jones

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