South Korean President, Yoon Suk-yol has spoken with US President Joe Biden about the Inflation Reduction Act and its impact on Korean automakers.
When world leaders arrived in London for Queen Elizabeth II’s funeral, many took the opportunity to engage in diplomacy. South Korean President Yoon Suk-yol is one such leader who sent a message to US President Joe Biden, calling for the Inflation Reduction Act (IRA) and its domestic assembly requirement for electric vehicle subsidies to be addressed, They say Reuters,
The South Korean government has strongly opposed the IRA since its introduction, as the act states that subsidies for electric vehicles should only apply to vehicles assembled within the US, along with several other requirements. The South Korean parliament has said that the act could break a free trade agreement between the two countries and they could file formal complaints with several international governing bodies.
In addition to arguing that the IRA harms South Korean business, President Yoon has argued that the act may also be contrary to American interests. As the US seeks to move away from Chinese production dependence, allied alternatives such as South Korea will be instrumental in supplying.
South Korean government said Reuters“Our side explicitly conveyed the concern that (IRA) does not match the US drive for supply chain cooperation and will negatively impact future projects.”
So far, no changes have been made to IRAs, and no exceptions have been made for South Korean products. However, the South Korean government has made several agreements so far. Most notably, they have said that the introduction of the IRA be pushed back until Hyundai/Kia establishes its first US production facility in Georgia, a project that will likely take place by the end of 2023 at the earliest. .
The Biden administration has not addressed the matter, saying that further dialogue would be needed to fix the issue. Still, they are running out of time and the patience of the South Koreans is likely.
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