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The China Chamber of Commerce for Import and Export of Machinery and Electronic Products has voiced strong opposition to the US Inflation Reduction Act (IRA) on behalf of the Chinese automobile industry. The chamber claims that the IRA’s subsidies for new energy vehicles (NEVs) violate market economy laws and are aimed at suppressing China’s NEV industry, disrupting international trade order, and hindering global economic recovery. China has now requested that the World Trade Organisation (WTO) set up an expert panel after failing to reach a solution with the US, following a complaint it lodged on March 26 regarding these subsidies.
China’s Auto Industry Expresses Dissatisfaction with the US Inflation Reduction Act
The China Chamber of Commerce for Import and Export of Machinery and Electronic Products, representative of China’s automobile industry, vehemently opposed the measures under the US Inflation Reduction Act (IRA) on Tuesday. The chamber strongly defends the rights and interests of China’s new energy vehicle (NEV) industry and urges the US to adhere to the World Trade Organization rules, correct discriminatory subsidy policies, and curb unilateralism and trade bullying.
The IRA was legislated on August 16, 2022, and China lodged a complaint with the WTO dispute settlement mechanism over US NEV subsidies included in the IRA on March 26. Having failed to negotiate a resolution with the US, China requested the WTO to establish an expert panel on Monday. The chamber supports this government action to safeguard the Chinese NEV industry’s rightful rights and interests.
Acknowledging that the IRA’s NEV subsidies contravene market economy principlesand are intended to stifle China’s NEV industry growth, the chamber emphasized the detrimental impact on the fair competition of the global NEV industry, supply chain stability, international trade order, and global economic recovery.
The chamber endorsed the marked progress of China’s NEV industry in open competition, its contribution to the global supply, and its substantial impact on green transformation in the international energy sector and climate change response. It criticized the US’s protectionist and double-standard approach obstructing China’s NEV trade, stating this will not only impede US industrial growth but also hamper global climate change collaboration.
The chamber attributed the IRA’s discriminatory NEV subsidy measures to the US’s intent to prop up the local NEV industrial chain by suppressing certain countries. It noted that the US electric vehicle market supply and consumer confidence have declined following the act’s implementation, thus becoming a significant hurdle towards achieving electrification targets.
Secretary General of the Automotive Internationalization Professional Committee under the chamber, Sun Xiaohong, reported that post-IRA, approximately 80% of NEV models failed to meet subsidy eligibility, leading to delayed new car launches and damaged consumer confidence.
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