S. Korea, EU vow joint responses to U.S. Inflation Reduction Act

All News 11:27 December 02, 2022

SEOUL, Dec. 2 (Yonhap) -- South Korea and the European Union have agreed to work more closely for joint responses to a new U.S. act that excludes electric vehicles assembled outside of North America from tax incentives, the two sides have said.

The consensus was reached during a meeting between South Korea's Trade Minister Ahn Duk-geun and Valdis Dombrovskis, the EU's executive vice-president commissioner, in Brussels on Nov. 30 (local time), the Ministry of Trade, Industry and Energy said in a release issued Thursday.

The 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 South Korean and some European automakers will lose ground in the U.S. market, as they make EVs at domestic plants for export to the U.S.

During the meeting, Ahn proposed joint efforts to address concerns over the IRA and swiftly resolve the matter, as the two sides shared serious concerns over the act, the ministry said.

On Thursday, the EU official tweeted that the two sides "discussed our common concerns on discriminatory provisions in US Inflation Reduction Act. As like-minded partners, we agreed to coordinate our efforts and outreach to restore fairness."

South Korea, at both the government and business levels, has strongly voiced the need to create exceptions for Korean-made EVs and has sought joint responses with nations in the same position.

On Thursday, Biden acknowledged that the law may have "glitches" during a joint press conference with French President Emmanuel Macron, according to foreign media reports.

Seoul has been in talks with Washington to reflect its request in the U.S.' envisioned related guidelines, and South Korea was to provide the U.S. Treasury Department with another official input on the IRA this week, the ministry said.