The government of China announced it will bring a World Trade Organization (WTO) case against the United States regarding tax credits for electric vehicles (EVs). The Inflation Reduction Act, signed into law by President Biden in August 2022, offers U.S. customers a credit of up to $7,500 toward the purchase of an EV. To qualify for the credit, vehicle batteries must meet certain materials sourcing requirements and undergo final assembly or manufacturing in North America. The Chinese government argues that these credits are “discriminatory industrial policies” and hinder fair competition in the global EV market. 

More information about Inflation Reduction Act and the Clean Vehicle Tax Credit can be found at the BlueGreen Alliance Inflation Reduction Act and Bipartisan Infrastructure Law Resource Center. 

Following the Ministry of Commerce’s announcement, the BlueGreen Alliance issued the a statement from Executive Director Jason Walsh: 

“With the Inflation Reduction Act, the U.S. government is fulfilling its promise to support U.S. workers by investing in the domestic manufacturing of the clean economy here at home. EVs are undeniably a crucial part of that effort. Provisions like the Clean Vehicle Tax Credit highlight the win-win nature of this historic law—it will create and maintain good-paying jobs while helping to drive down a major source of emissions. This case against the Clean Vehicle Tax Credit highlights the need to ensure that trade rules support—and certainly do not undermine—the global fight against climate change.”