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Uzone.id – China has filed a lawsuit against the United States at the World Trade Organization, claiming that the U.S. electric vehicle subsidy policy is unfair and discriminatory.
China said it had appealed to the World Trade Organization (World Trade Organization/WTO) regarding the high tariffs applied by the European Union on imports of electric vehicles from China.
The European Union in July imposed tariffs of up to 37.6 percent on Chinese-made vehicles after it was found that the automaker received large subsidies from the government that undercut European competitors. However, China said on Friday that any support it provides to the domestic electric vehicle market is provided by WTO rules.
In a statement, China’s Ministry of Commerce said it had appealed the tariffs “to protect the development rights and interests of the electric vehicle industry and cooperation in global environmentally friendly transformation.”
“The EU’s initial decision has no factual and legal basis, seriously violates WTO rules, and undermines the overall situation of global cooperation in tackling climate change,” the statement said.
“We urge the EU to immediately correct its erroneous practices and jointly safeguard the stability of China-EU economic and trade cooperation as well as the electric vehicle industry and supply chain.”
At the heart of Beijing’s lawsuit is the US Inflation Control Act (IRA). Effective January 1, 2024, the law prohibits subsidies for electric vehicles containing components made in China, Iran, North Korea, and Russia. Subsidies can reach US$ 7,500 per unit.
This rule means that now only 13 of the 50 electric vehicle variants on the US market can receive subsidies. In 2023, vehicles eligible for subsidies will reach 24 variants. Automakers have struggled to get parts that would make their models eligible for the credits.
Beijing views the regulation as discriminatory towards vehicles using new and renewable energy. Beijing also believes that the regulations disrupt healthy competition in the electric vehicle market. New vehicle production and electric vehicle industry supply chain.
Because of this, Beijing considers the IRA to have violated the rules of WTO. Beijing urges Washington to improve regulations and eliminate discrimination.
The IRA is part of various US and Western European regulations to hinder China’s electric vehicles. This is because the price of vehicles made in China is up to half the price of those made in the US and Western Europe.
This is reflected in the prices of BYD products. The BYD Seagull, which was revealed at an exhibition in Munich, Germany, will be marketed at prices starting at US$ 11,500. Meanwhile, several other models are sold at an average price of US$ 20,000. Cars made in the US and Western Europe are sold starting from US$ 30,000.
Low prices are one of the keys to BYD marketing up to 240,000 cars to 70 countries by 2023. BYD will also expand by opening factories in Mexico and Hungary.
”They are preparing for the US market, waiting for the right time,” said Dunne Insight CEO Michael Dunne.
In the view of Chinese automakers, the European and US markets will be very profitable. ”They have to come in and compete and win here to expand globally,” Dunne said.
US trade negotiator, Katherine Tai, said the US would review China’s lawsuit. On the other hand, he views the IRA as a way for the US to contribute to a clean energy future. He accused China of using an unfair strategy and unilaterally only benefiting Chinese producers.
The European Commission said it would respond to China’s complaints through appropriate channels.
“The EU is carefully studying all the details of this request and will react to the Chinese authorities in due course by WTO procedures,” a European Commission spokesperson told the news agency. AFP.
WTO spokesperson Ismaila Dieng said in a statement that the organization had received China’s request, and that “further information will be available once the request is circulated to WTO members.”
This obligation will come into force in November for five years, pending a vote from EU member states.
China’s dominance in the electric vehicle market stems from a 2015 industrial policy dubbed “Made in China 2025.” The policy sought to make China the dominant force in global high-tech manufacturing, including electric vehicle manufacturing.
According to a report from the International Energy Agency (International Energy Agency/IEA), electric vehicle sales in China accounted for 8.1 million of the 13.7 million total cars sold worldwide in 2023. The Atlantic Council reports that the EU is the leading market for Chinese electric vehicles, representing approximately 40 percent of China’s electric vehicle export sales in 2023.
In May, the United States took steps to address the dominance of China’s electric vehicle industry by imposing 100 percent tariffs on Chinese-made electric vehicles. Canada may follow the lead taken by the United States.
In reaction to the upsurge in European tariffs, China has begun investigations into French cognac and pork exports, feeding concerns about a prospective trade war with the EU.
