United States — Certain Tax Credits Under the Inflation Reduction Act

On March 26, 2024, China requested consultations with the United States regarding certain subsidies under the Inflation Reduction Act (IRA), which China claims are contingent on the use of domestic goods over imported goods or discriminate against goods of Chinese origin. These subsidies include the Clean Vehicle Credit and the Renewable Energy Tax Credits (such as the Investment Tax Credit for Energy Property, the Clean Electricity Investment Tax Credit, the Production Tax Credit for Electricity from Renewables, and the Clean Electricity Production Tax Credit). China argues that these measures are inconsistent with Articles III:4 of the GATT 1994, Articles 2.1 and 2.2 of the TRIMS Agreement, Articles 3.1(b) and 3.2 of the SCM Agreement, and that the Clean Vehicle Credit violates Article I:1 of the GATT 1994. On April 5, 2024, the United States accepted China’s request to enter into consultations, though it raised concerns about whether the items in question constituted a "measure" under Article 4 of the DSU and whether national security issues were involved. Panel and Appellate Body proceedings: On 15 July 2024, China requested the establishment of a panel, which the DSB deferred on 26 July 2024. The panel was established on 23 September 2024, with several countries reserving their third-party rights. On 10 December 2024, China requested the Director-General to compose the panel, which was done on December 19, 2024.