United States — Certain Tax Credits Under the Inflation Reduction Act - Other

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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.

United States — Certain Tax Credits Under the Inflation Reduction Act

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An aim to achieve a quantifiable outcome within a given time-frame, set by an institution such as a national government.

Policy instruments are techniques or tools used by governing authorities to promote certain policies in order to achieve predetermined goals. Put simply, instruments are how a government tries to achieve its goals, with this taxonomy being focused on national policy instruments.

Risk is the potential for adverse consequences resulting from the dynamic interplay between (climate-related) hazards, exposure, and vulnerability of affected human or ecological systems.

Groups  of people who are adversely affected by climate change or the response to it

A set of principles, processes, and practices that build economic and political power to shift from an extractive economy to a regenerative economy.

Renewable energy means all forms of energy produced from renewable sources in a sustainable manner.

Fossil fuel is a generic term for non-renewable energy sources such as coal, fossil gas, and oil (including crude oil, and petroleum products), that can be used for electricity and heat generation. Fossil fuels are hydrocarbons formed from pressurised and heated organic material buried over millions of years.

Molecules in the atmosphere that play a key role in the greenhouse effect by trapping heat radiating from Earth’s surface.

Area of the economy in which actors engage in identical or related activities.

In human systems, the process of adjustment to actual or expected climate change and its effects, in order to moderate harm, increase resilience or exploit beneficial opportunities. In natural systems, the process of adjustment to actual climate change and its effects; human intervention may facilitate adjustment to expected climate change and its effects.

The management and allocation of funds, assets and investments to meet various objectives

This sector involves the wholesale and retail selling of goods.

The activities of industries involved in the production, distribution, and sale of energy, including electricity, gas, and renewables.

Any compulsory, unrequited payment to the government levied on corporations or individuals. This can be for environmental reasons, such as introducing a Carbon tax to set a price that emitters must pay for the greenhouse gases they emit.

A subsidy is a direct or indirect payment to individuals or businesses, typically provided as a government cash payment or a specific tax reduction.

Either money or something of monetary value is transferred between two or more organisations, people or countries.

Activities that involve planning, designing and building infrastructure, residential, and commercial structures.

This sector involves activities to move goods and people, alongside the storage of products.

Direct investments by the governments using public funds. This can be to support climate initiatives or integrate climate into other projects.

A tax advantage is an economic benefit applied to certain accounts or investments that are, by law, tax-reduced, tax-deferred, or tax-free. This can apply to investments in areas such as green energy projects or the agricultural sector, where tax advantages can help manage financial risks.

The activities of industries that transforms raw materials into finished goods through industrial processes.

United States — Certain Tax Credits Under the Inflation Reduction Act - Other

Policy instrument

Renewable energy

Economic sector

Finance