China opens WTO dispute against US over tax credits for EVs

China has filed a complaint against the United States with the World Trade Organization over US government tax incentives for buyers of electric vehicles.

China's Ministry of Commerce announced the move on Tuesday. It said the US tax credit program has excluded Chinese products and distorted fair competition.

US President Joe Biden's administration introduced the tax credits based on the Inflation Reduction Act, which was enacted in 2022. EVs have to undergo final assembly in North America to qualify for the tax breaks.

Eligible models must also meet critical mineral and battery component requirements.

Some say the tax credit program is aimed at removing Chinese businesses from the supply chain.

China's Ministry of Commerce says it firmly opposes the US measure as it has seriously disrupted the global supply chain and violates WTO rules.

Tensions between Beijing and Washington continue over semiconductors and other technologies. The WTO dispute brought by China could fuel their rivalries.