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

China’s Electrifying Dispute with the US: What it Means for the Global Automotive Industry

On Tuesday, China filed a complaint with the World Trade Organization against the U.S., accusing it of having discriminatory requirements for electric vehicle subsidies. The Chinese Commerce Ministry did not specify what prompted this move, but it is believed that the new U.S. rule that went into effect on January 1 is the main reason behind this decision. According to the Chinese Ministry, the U.S. has formulated discriminatory subsidy policies for new energy vehicles under the 2022 Inflation Reduction Act, which is part of President Joe Biden’s climate legislation. These policies exclude Chinese products, distort fair competition, and disrupt the global supply chain for new energy vehicles.

The impact of this case remains uncertain as member countries of the WTO can file complaints against each other’s trade practices and seek relief through a dispute settlement process. However, if the U.S loses and appeals the ruling, it may not progress due to the WTO’s Appellate Body not functioning since 2019. The Chinese government has been growing increasingly concerned about Western policies towards China and its businesses and this latest move is seen as another step in pushing back against such practices.

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 these discriminatory policies by US lawmakers which will have an impact on global automotive supply chain and market dynamics .

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