China has requested the World Trade Organization establish a panel to settle a dispute over U.S. electric vehicle subsidies as part of the Biden administration’s Inflation Reduction Act, after the two sides failed to reach a negotiated solution, a spokesperson for China’s Ministry of Commerce said Monday.
Beijing requested consultations in March with the United States over Biden’s signature climate change law, marking the first step of the dispute process. WTO rules required China and the United States to hold talks on the dispute during a 60-day consultation period before Beijing could take the next step of requesting a panel to adjudicate the dispute.
“Due to the failure of the United States to reach a solution through consultation with China, on July 15, China submitted a request to the WTO to set up an expert group,” a MOFCOM spokesperson said, per an informal translation.
China has challenged the Inflation Reduction Act’s EV tax subsidies, as well as four tax credits related to renewable energy. Beijing has argued that the law violates WTO rules because, among other reasons, its regional requirements for production “artificially sets trade barriers” while also pushing “up the cost of green energy transformation.”
