WTO faults US in dispute brought by China over clean energy subsidies
Large tax credits under Biden’s landmark climate law are inconsistent with WTO agreements and should be withdrawn, a panel ruled
The World Trade Organization has faulted the United States in a dispute brought by China over US green energy subsidies introduced under former US president Joe Biden, according to a ruling issued on Friday.
The global trade body’s dispute panel said that large tax credits granted under Biden’s landmark climate law, the Inflation Reduction Act (IRA), were “inconsistent” with several WTO agreements and should be withdrawn.
That law, which was signed by Biden in 2022, was the largest climate investment in US history, but it has been dramatically eroded since President Donald Trump came to power last year.
China launched the WTO dispute in March 2024, accusing Washington of unfair competition over its support to companies in the energy transition sector and to electric cars manufactured on US soil.
The WTO agreed in September that year to set up a panel of experts to examine the case, which focused on US investment tax credits (ITCs) and production tax credits (PTCs) for renewable energy projects, as well as electric vehicle subsidies.
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The United States insisted at the time that the act was a tool to address the climate crisis and “invest in US economic competitiveness”.