WASHINGTON – Today, the Office of the United States Trade Representative issued the following statement in regard to the panel report circulated by the World Trade Organization (WTO) in the dispute brought by China concerning four energy tax credits passed by Congress. The WTO report found against U.S. legislation adopted, in part, in response to massive Chinese excess capacity in the renewable energy sector.
“This panel report highlights what the Trump Administration has been saying for years: existing WTO rules are inadequate to address massive and harmful excess capacity in numerous sectors, including in energy technology.
“Incredibly, the WTO report finds that the United States has broken WTO rules by defending industries that China unfairly targeted for global dominance, but does not say a word about the harms caused by China’s industrial policies and massive excess capacity. It is also absurd that the WTO panel questioned whether the United States has deep and abiding concerns with ensuring that the conditions of competition within the U.S. market are fair.
“As our words and our actions have shown, the United States has long-standing and serious concerns with excess capacity and its impact on market-oriented economies. This report only 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.
“The United States remains committed to defending our companies, securing supply chains, and rebalancing trade. We will always take necessary measures to support U.S. jobs and pursue economic and national security.”
Background:
In March 2024, China initiated this WTO dispute – United States – Certain Tax Credits Under the Inflation Reduction Act by filing a request for consultations. China alleged that certain energy tax credits were inconsistent with various provisions of the GATT 1994, the TRIMS Agreement, and the SCM Agreement. The WTO Dispute Settlement Body established a panel in December 2024.
The WTO report, circulated on January 30, 2026, found that the tax credits at issue were inconsistent with national treatment obligations under the GATT 1994 and the TRIMS Agreement, and constituted prohibited subsidies under the SCM Agreement. The report also rejected the U.S. defense that the measures were necessary to protect U.S. public morals, including norms against unfair competition and coercion, under the general exceptions provision of the GATT 1994.
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