The World Trade Organization has faulted the United States in a dispute brought by China over US green energy subsidies, in a ruling slammed by Washington on Friday as ‘absurd’.
The global trade body’s dispute panel said that large tax credits granted under former president Joe Biden’s landmark climate law, the Infl ation Reduction Act (IRA), were ‘inconsistent’ with several WTO agreements and should be withdrawn.
That law, which was signed by Biden in 2022, was the largest climate investment in US history, but it has been dramatically eroded since President Donald Trump came to power last year. China hailed the panel ruling as ‘objective and impartial’.
But US Trade Representative Jamieson Greer was harshly critical, saying in a statement that the ruling showed that ‘existing WTO rules are inadequate to address massive and harmful excess capacity in numerous sectors, including in energy technology’.
It ‘underscores the serious doubts that the United States has long expressed regarding the capacity of the WTO to regulate trade in a world marked by severe and sustained trade imbalances’, he said.