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China’s Attack on U.S. Inflation Reduction Act Shows Need for Reform of WTO Rules to Remove Barriers to Climate Action 

WASHINGTON, D.C. — Today, China filed a complaint at the World Trade Organization (WTO) against the United States, alleging the requirements to qualify for electric vehicle tax credits in the Inflation Reduction Act (IRA) are discriminatory.

Global Trade Watch Director Melinda St. Louis issued the following statement in response: 

“The climate crisis is too urgent for the U.S. or any country to allow outdated trade rules — written long before governments were taking climate change seriously — to distract us from enacting bold climate policies. 

“China’s WTO case against the Inflation Reduction Act is yet another example of how WTO rules enable countries to attack policies that combat climate change and support a clean energy transition.

“We’ve been warning since before the passage of the Inflation Reduction Act that antiquated WTO rules would threaten our ability to realize the green transition. Prominent labor, environmental, and consumer groups have urged the U.S. government to boldly implement the IRA as intended despite trade-pact attacks — and to make a commitment not to use such trade rules to challenge other countries’ climate policies.

“Such a ‘Climate Peace Clause’ would temporarily halt cases like this one so countries can prioritize the green transition and revise the WTO rules currently creating unnecessary hurdles. 

“We must move forward with IRA implementation and work to enact even bolder policies to transform our economy for a clean energy future, and support other countries that do the same.” 

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