China Files WTO Complaint Over US Electric-Vehicle Subsidies

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(Bloomberg) — China is taking its dispute with the US over electric-vehicle subsidies to the World Trade Organization, challenging elements of President Joe Biden’s signature climate law passed in 2022.

The Inflation Reduction Act and associated rules are “discriminatory” and have “seriously distorted” the global EV supply chain, the Chinese Ministry of Commerce said in a statement Tuesday announcing a complaint it’s filed to the WTO.

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The US’s top trade official, Ambassador Katherine Tai, responded that China continues to use “unfair” policies and practices to undermine fair competition and dominate global markets.

The EV sector has increasingly been caught up in tensions over trade and geopolitics as the world transitions away from the internal combustion engine. The European Union is likely to impose additional tariffs on EVs imported from China due to accusations of unfair subsidies, while world-leading Chinese battery firms have run into resistance from Washington.

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Under guidelines the Biden administration released late last year, any company that is subject to the jurisdiction of China’s government, or is controlled by the government — including if it’s at least 25% owned by a Chinese government authority — is considered an FEOC. The restrictions also apply to all production inside of China.

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