According to a statement released by Yoon’s office on Thursday, South Korean President Yoon Suk-yeol has requested United States President Joe Biden for assistance in addressing South Korea’s concerns over new laws on electric car subsidies in the United States.
Yoon’s first trip to the United States since becoming president in May was overshadowed by Seoul’s resistance to the Inflation Reduction Act (IRA) of the United States, which was signed into law by President Joe Biden last month. Because the new legislation does away with federal tax incentives for electric cars (EVs) manufactured in regions other than North America, businesses such as Hyundai Motor Co (005380.KS) and its subsidiary Kia Corp (000270.KS) will no longer qualify for the programme.
Yoon is claimed to have conveyed his concerns to President Biden in London, where both leaders were in attendance at the death of Queen Elizabeth of the United Kingdom, as well as in New York on Wednesday, on the fringes of the United Nations General Assembly, according to his office.
Yoon’s office released a statement that said, “President Yoon asked close collaboration so that the U.S. government may address our issues in the process of implementing the Inflation Reduction Act.” Yoon’s appeal came in the form of a plea for close cooperation. According to the report, Biden responded by stating that he was “fully aware” of South Korea’s worries and requested for more dialogue.
There was no mention of electric car incentives in the White House’s report that the two leaders addressed a wide variety of topics, including the resiliency of supply chains, economic and energy security, and the effects of climate change. After South Korean corporations revealed ambitious investment intentions for the United States, Seoul saw the IRA as a violation of President Joe Biden’s promises to strengthen economic connections between the two countries.
Following a meeting on Wednesday in Washington, DC, between the United States Secretary of Commerce Gina Raimondo and South Korea’s Trade Minister Lee Chang-yang, the United States Department of Commerce made a veiled reference to potential tensions between the two nations. The legislation in question is expected to require foreign content providers to pay fees for using South Korea’s networks.
There is a legislative effort in South Korea to force global content providers such as Netflix (NFLX.O) and Alphabet’s Google (GOOGL.O) to pay local network costs. Among the companies that would be subject to this requirement are The commerce ministry in Seoul said that Rhode Island Governor Gina Raimondo understood Seoul’s worries on the IRA and promised to continue talks.