China’s automobile industry is pushing back against measures in the U.S. Inflation Reduction Act (IRA), with industry representatives decrying the act’s provisions as discriminatory and harmful to global trade.
On Tuesday, the China Chamber of Commerce for Import and Export of Machinery and Electronic Products, speaking on behalf of China’s auto sector, expressed “serious dissatisfaction and firm opposition” to the IRA’s policies affecting new energy vehicles (NEVs). The chamber urged the United States to uphold its obligations under World Trade Organization (WTO) rules, correct what it calls “discriminatory subsidy policies,” and abandon “unilateralism and trade bullying practices.”
China’s WTO Complaint
Signed into law on August 16, 2022, the IRA includes subsidies for NEVs that require vehicles to be assembled in North America and source battery materials from the U.S. or its free trade partners. China contends that these requirements unfairly exclude Chinese NEVs from the U.S. market.
In response, China filed a complaint with the WTO on March 26, seeking consultations over the disputed subsidies. With negotiations failing to yield a solution, China requested the establishment of a WTO expert panel on Monday to examine the issue.
The chamber affirmed its support for the government’s actions, emphasizing the need to protect the “legitimate rights and interests” of China’s NEV industry on the global stage.
Impact on Global Trade and Climate Goals
The chamber argues that the IRA’s NEV subsidies violate the fundamental principles of the market economy and are aimed at suppressing China’s burgeoning NEV industry. “The measures seriously damage the fair competition environment of the global new energy automobile industry and the stability of the industrial and supply chains,” the chamber stated. “They disrupt the international trade order and impede global economic recovery.”
Highlighting the contributions of China’s NEV sector to global sustainability, the chamber noted that the industry has made significant progress through open competition, enriching global supply and advancing the green transformation of the international energy sector. The U.S.’s protectionist policies and “double standards,” it said, hinder the free trade of Chinese NEVs and could undermine global cooperation on climate change.
Domestic Repercussions in the U.S.
According to the chamber, the IRA’s policies are backfiring within the United States. “The discriminatory NEV subsidy measures under the IRA are aimed at supporting the local NEV industrial chain by suppressing specific countries,” it said. “In fact, the U.S. electric vehicle market supply and consumer confidence suffered a blow after the release of the act, which has become the biggest obstacle to the realization of the electrification goal.”
Sun Xiaohong, secretary-general of the automotive internationalization professional committee under the chamber, highlighted the adverse effects on the U.S. market. “After the IRA took effect, about 80 percent of NEV models on the market did not meet the subsidy requirements, which not only affected the launch of new cars but also hit consumer confidence,” she explained.
Call for Fair Competition
The chamber called on the United States to “immediately correct discriminatory subsidy policies” and restore fair competition in the global NEV industry. It stressed that protectionism would not aid U.S. industrial development but would impede global efforts to combat climate change.
Reference(s):
China auto sector opposes measures under U.S. Inflation Reduction Act
cgtn.com
