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S. Korea concerned about far-reaching negative impacts of U.S.' EV tax law on bilateral ties

Corporate Newsroom 09:46 September 22, 2022

SEOUL, Sept. 22 (Yonhap) -- South Korean Industry Minister Lee Chang-yang has voiced worries that the new U.S. law that gives tax benefits only to electric vehicles made in North America will have negative impacts on the overall bilateral ties and urged a swift solution, his office said Thursday.

Lee made the comments during a meeting with U.S. Secretary of Commerce Gina Raimondo held in Washington on Wednesday, according to the Ministry of Trade, Industry and Energy.

The U.S.' Inflation Reduction Act (IRA), signed by U.S. President Joe Biden in August, gives up to US$7,500 in tax credits to buyers of EVs assembled only in North America, sparking concerns that Hyundai Motor Co. and Kia Corp., giant automakers based in South Korea, will lose ground in the U.S. market, as they make EVs at domestic plants for export to the U.S.

"Discriminatory measures, such as the IRA, would hurt the momentum for cooperation at a time when there are many issues for the two nations to work together, including semiconductors, batteries and nuclear power generation. Its swift solution will do good to the both sides," Lee said in a press release.

He stressed that South Korea has been actively participating in various U.S.-led global coordination channels on supply chains, including the Indo-Pacific Economic Framework, and the IRA runs against such a trend.

The U.S. secretary shared the concerns and vowed to continue candid consultations to seek solutions, according to his office.

The Seoul government has sought to reflect its requirement to related guidelines, as it seems not possible to amend the law before the U.S. mid-term election in November.

Earlier this week, Lee told reporters South Korea hopes to find "a political resolution."

This photo, provided by South Korea's industry ministry, shows Industry Minister Lee Chang-yang (L) shaking hands with U.S. Secretary of Commerce Gina Raimondo after a meeting in Washington on Sept. 22, 2022. (PHOTO NOT FOR SALE) (Yonhap)


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