Europe and Japan Opposed to U.S. EV Subsidy Discrimination

U.S. President Joe Biden signs the Inflation Reduction Act into law on Aug. 16.

The European Union and Japan, as well as South Korea, are objecting to the U.S. Inflation Reduction Act, pointing out that the United States is violating the principle of fair competition. European Commission Executive Vice President Valdis Dombrovskis and U.S. Trade Representative Katherine Tai discussed the matter on Sept. 1 with the former expressing concerns.

According to the act, the U.S. government will give each electric vehicle (EV) buyer a subsidy of up to US$7,500 on condition that the vehicle is made in the United States. The South Korean government is calling it into question in various ways, and the National Assembly passed a resolution against the act on Sept. 1.

According to the executive vice president of the European Commission, European EV makers may be discriminated against by the act. European Commission spokesperson Miriam García Ferrer also remarked that the act is a discrimination against non-U.S. automakers and a violation of WTO rules.

The Japanese Embassy in the United States said on Sept. 1 that the act is against U.S.-Japan cooperation for building more resilient supply chains and the Japanese government will keep making joint efforts with the other partners, including the European Union.