World Trade Organisation

The 2022 Inflation Reduction Act, President Joe Biden’s landmark climate law, is now expected to prompt a trillion dollars in government spending to fight climate change and trillions more in private investment. But the law and Biden’s broader “buy American” agenda include measures that discriminate against imports. One year in, these policies, such as the law’s electric vehicle subsidies, appear to be succeeding at growing domestic clean energy industries – consider the US$100 billion in newly announced battery supply chain investments. But we believe the law also clearly violates international trade rules. The problem is not the crime but the cover-up. Today’s trade rules are ill-suited for the climate crisis. However, simply tearing them down could hinder economic growth and climate progress alike. If U.S. leaders instead take responsibility for forging an improved international trade system – rather than denying the violation...