I can't help but laugh at this development and how it has been swept under the rug for the most part by the main stream media. The only reason I can think of it not being bigger news is that well Republicans are in charge and so Democrats really do not want this brought up because well there Inflation Reduction Act tax credits were found to be discriminatory.
So what happened? Well in early 2024 China filed a complaint with the WTO over the trade impacts of the Inflation Reduction Act because this extended the existing investment and production tax credit and expanded the potential value of those credits by providing new "bonus" incentives that could be received by using U.S. made materials.
China stated that the subsidies "that are contingent upon the use of domestic over imported goods or that otherwise discriminate against imported goods" violate the WTO agreement and "threaten to undermine international cooperation on reducing and mitigating the effects of climate change. China continued with stating that the incentives were "discriminatory, protectionist, and contrary to WTO rules"
I honestly wish I could make this up because out of all the countries out there China is the one who has shown time and time again that they are not a free trade country and they will subsidize businesses pumping out things like rare earths and solar panels at a loss to Chinese companies to drive other nations companies out of business. Or we could add how they have with many US companies required IP developed in the US to be shared with them to operate in China.
Where hindsight is always 20/20 Democrats should be thanking Republicans now is that China dropped the highest profile complaint on EV tax credits. That $7,500 credit could only be used on vehicles made in the US so China's BYD and others could not access them. When the credits were removed in the On Big Beautiful Bill the Chinese dropped that complaint since the tax credit was no longer around.
The WTO panel has "recommended" the US withdraw the tax credits under the Inflation Reduction Act by October 1, 2026. It will be interesting to see if the Trump Admin and Congressional Republicans highlight this in the coming weeks as the move to regain lost faith with the public.
China being able to leverage the WTO against policies like this in the US is also concerning as the reasoning China used was "safeguard the interests of China's electric vehicle industry and maintain a level playing field globally." The same argument could be made by the world really against China but China would naturally lash out over people calling them out. Thankfully, with the WTO's top court being paralyzed and not able to issue a final rule this is at the end of the day a bunch of empty words but it does highlight the issues that face any country trying to get away from China.
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