WTO panel backs China in case against US clean energy subsidies

A World Trade Organization panel on Friday backed a complaint by China, recommending changes to US. tax credits for clean energy that Beijing said discriminated against imports.

The panel’s report recommended the US withdraw the measures under the Inflation Reduction Act by October 1, 2026.

“That date appears a reasonable deadline for the withdrawal of the ITC/PTC Domestic Content Bonus Credits,” the panel said.

“This panel report highlights what the Trump administration has been saying for years: existing WTO rules are inadequate to address massive and harmful excess capacity in numerous sectors, including in energy technology,” the office of the US. Trade Representative said in a statement.

Washington has the right to appeal the decision, but no final ruling would ensue since the WTO’s top appeals court is paralyzed.

“China commends the objective and fair ruling of the panel,” China’s Ministry of Commerce said.

The wide-ranging IRA brought in by former U.S. President Joe Biden provides billions of dollars in tax credits to help consumers buy electric vehicles and companies produce renewable energy in an effort to decarbonise the mighty U.S. power sector.

China argued in its March 2024 complaint to the WTO that the proceedings were necessary to safeguard the interests of China’s electric vehicle industry and maintain a level playing field globally.