New energy vehicles top China’s list of subsidy questions for U.S.

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Charging station for electric vehicles is pictured in Pasadena

By Tom Miles

GENEVA (Reuters) – China sent the World Trade Organization 50 questions about U.S. subsidy programs on Friday, asking for more information on federal and state support for new energy vehicles, industrial energy efficiency, agriculture and in other areas.

The WTO has strict rules on subsidies and every member has to declare how their subsidy programs work, to ensure they are not breaching trade rules by giving their own national firms an unfair advantage. China’s 10-page list of questions focused on the U.S. notification of its subsidy programs in 2015.

“As far as China knows, Obama began to vigorously support the new energy vehicle sector at the start of his presidency,” China said, citing Section 205 of the U.S. Energy Improvement and Extension Act of 2008.

“As for local governments, according to the statistics from non-governmental organizations in the United States, 37 states in the United States have introduced policies in support of new energy vehicles,” it said.

“Can the United States explain when these subsidies will be notified?”

China also asked how state governments ensured that their subsidy policies are fairly applicable to domestic and foreign-invested firms, and requested lists of foreign firms that had received those subsidies.

It had “doubts about the specificity of specific policies, the conditions for granting subsidies and the amounts of subsidies,” and it asked the United States to clarify.

The intense scrutiny of U.S. subsidy programs follows similar U.S. demands for Chinese transparency, and reflects the growing international competition between countries seeking to dominate emerging industries and new technologies.

The Chinese questions are far from a trade dispute at the WTO, but demanding transparency puts Washington on notice that China is closely watching U.S. trading practices in the most sensitive sectors, and could take further action.

The subjects of China’s wide-ranging questions ranged from payroll rebates under Mississippi’s “Motion Picture Production Incentive Program” to coal loading facilities in West Virginia and fishing boat fuel in Washington state.

(Reporting by Tom Miles; Editing by Toby Chopra)

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