China has lodged a formal complaint against the Biden Administration with the World Trade Organization (WTO) over what it perceives as "discriminatory practices" regarding electric vehicle (EV) subsidies, according to AP News.
The dispute centers on recent changes in U.S. Biden Administration policy that disqualify car buyers from receiving tax credits ranging from $3,750 to $7,500 if certain battery components or critical minerals are sourced from companies based in China, Russia, North Korea, or Iran.
These major changes, implemented as part of President Joe Biden's 2022 Inflation Reduction Act, aim to promote domestic production and reduce reliance on foreign suppliers.
The adjustments in US policy, enacted from January 1 onwards, have notably limited the selection of electric vehicle models qualified for tax incentives, leading car manufacturers to rapidly adjust their supply chains to adhere to the updated guidelines.
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Why China Thinks Joe Biden's Electric Vehicle Policies Are Discriminatory
China's Ministry of Commerce issued a statement asserting that Joe Biden's administration has formulated discriminatory subsidy policies under the guise of addressing climate change concerns. The statement argues that these policies unfairly target Chinese products, distort competition, and disrupt global supply chains within the growing electric vehicle sector.
The complaint, filed through the WTO's dispute settlement process, is China's first challenge against the US's unfair trade practices. China also perceives the measures implemented by the US as potentially impeding its efforts to expand its influence and presence in the international electric vehicle market.
Interestingly, the European Union, along with the US, initiated its investigation into Chinese subsidies for electric vehicles last year.
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