Subsidy a pretext for US to intensify trade row

Industrial subsidy has become a bone of contention between China and the United States. The US claims that, through its industrial policy, China gives subsidies and financial support to its domestic industries thereby distorting the market. But the fact is, the US itself provides huge amounts in form of industrial subsidy for its domestic enterprises.

A World Trade Organization report released on June 27 said eight states of the US illegally subsidize renewable energy generation. They provide subsidy for "qualified" renewable industries through financial and taxation policies, which is a violation of the WTO's national treatment principle in the General Agreement on Tariffs and Trade 1994 and results in imported products losing out to US domestic products because of the unfair competition.

In October 2004, the European Union took legal action against the US for giving illegal subsidy to American aircraft manufacturer Boeing. The WTO passed the final ruling in March 2019 after 15 years of investigation and review, saying the US subsidy to Boeing in the form of tax exemption is illegal and causes loss to Airbus.