Bloomberg reporting – China has initiated a legal challenge against the United States at the World Trade Organization (WTO), targeting the US Inflation Reduction Act’s provisions that effectively discourage electric vehicle (EV) manufacturers from utilizing battery materials sourced from China. Labeling these rules as “discriminatory” and accusing them of distorting the global EV supply chain, the Chinese Ministry of Commerce demands a reversal of these policies.
This lawsuit underscores the escalating tensions within the electric vehicle sector, which is becoming a focal point of broader trade and geopolitical disputes. The contention arises amid the US implementing restrictions to limit EV purchase tax credits to vehicles without battery components or raw materials from “foreign entities of concern,” directly impacting Chinese battery firms and the wider supply chain. This move also reflects growing international scrutiny over China’s dominant position in the EV market, with similar apprehensions about unfair trade practices leading to potential tariffs from the European Union.
