While the European Commission continues to investigate China’s subsidies to its domestic producers to allow them to lower prices, in the United States, a major US climate plan passed in 2022 has already allowed some doors to be closed to Chinese producers to encourage Americans to turn to local models In Europe, the aforementioned investigation should lead to higher customs duties on vehicles imported from Chinawhile France has already taken action by excluding these models from the scale of environmental bonuses.

But China does not intend to allow this, especially since European manufacturers, like the Americans, hope to benefit from the Chinese market. In addition, these conservative measures, taken by Europe and the USA, do not necessarily bring satisfaction to all manufacturers.

China vs. the US: An Endless Trade War?

Beijing filed a complaint with the World Trade Organization (WTO) against the subsidies allocated by the United States to the American sector of new energy vehicles. This action is intended to condemn what they believe unfair competition from Washington.
China’s protest is based on the “big American climate plan IRA (Inflation Reduction Act)” passed in 2022. According to Beijing, the plan includes discriminatory subsidies for new energy vehicles, which would distort fair competition and seriously disrupt global industrial and supply chains in the sector. China’s Ministry of Commerce has criticized the measures, saying they violate WTO rules.
In a statement, China’s ministry said it strongly opposes such practices and calls on the United States to respect WTO rules by correcting its discriminatory industrial policies. The complaint comes amid already heightened trade tensions between Beijing and Washington over tariffs, advanced technology and even platforms like TikTok.

Is the balance of power changing?

The American response did not take long. Catherine Tye, the US trade representative, defended the IRA in a statement. According to her, this plan allows the United States to seriously fight the global climate crisis while investing in the country’s economic competitiveness. She emphasized that these measures help build a clean energy economy based on American innovators, workers and manufacturers.
Catherine Tai also blamed China use unfair policies and practices to undermine competition and continue the dominance of Chinese manufacturers in both the Chinese and global markets.

This trade tension comes as China recently overtook Japan to become the top auto exporting country in 2023, with Last year, 5.22 million cars were exporteda third of which were all-electric, according to Chinese customs.