REM: China files WTO dispute over US subsidies for EVs

China has opened dispute settlement proceedings against the US at the World Trade Organisation (WTO). The Chinese mission said it is to safeguard its electric vehicle (EV) industry.

China said it was questioning what it described as "discriminatory subsidies" under the US Inflation Reduction Act (IRA) of 2022, which favours domestically produced components such as wind turbines and EVs. It gives tax credits for the purchase of EVs, with a bonus added for domestically produced vehicles.

"Under the disguise of responding to climate change, reducing carbon emission and protecting environment, (these IRA subsidies) are in fact contingent upon the purchase and use of goods from the United States, or imported from certain particular regions," said the Chinese mission.

The IRA subsidies violate international trade treaties such as the General Agreement on Tariffs and Trade (GATT), said China.