U.S. President Joe Biden sent a letter to President Yoon Suk-yeol reassuring him that discussions will continue over Korean concerns about the Inflation Reduction Act (IRA), according to Yoon’s office.
The message, which was received Tuesday, is the latest indication from the White House that some compromise may be possible allowing buyers of Korean EVs to qualify for a subsidy despite these EVs not meeting local-content requirements set out in the IRA.
“It stressed that honest and open discussion will continue between Korea and the United States,” an official from the president’s office said.
The official added that the letter is a follow up to discussions between the two presidents in New York and London, and said that the letter made reference to the positive role played by Korean companies and the alliance between the two countries.
“President Biden said he is certain that Korea will play a key role in achieving the common goal of strengthening the alliance between Korea and the U.S.,” the official added. “I think there is meaning in expressing confidence and trust in our companies.”
Under the terms of the IRA, buyers of EVs assembled in the United States are eligible for a $7,500 tax credit for vehicles purchased after Aug. 16, 2022, extending an existing program that offered a $7,500 tax credit for EV purchases regardless of origin.
Buyers of foreign assembled EVs, such as those made by Hyundai Motor and Kia, are no longer qualified for the tax credit.
Korean carmakers say that the law will have a significant impact on their businesses and have noted a fall in EV sales in the United States since the law went into effect.
Hyundai Motor is planning to have an EV assembly plant up and running in the state of Georgia in 2025. Kia has no plans for EV manufacturing in the United States.
The president’s office reported that Yoon and Biden discussed the IRA and financial market stability when they met in New York and London. The Democratic Party (DP) argues that the meetings were too short for any substantial discussions to have taken place.
The DP has accused Yoon of jeopardizing the alliance between the two countries due to a hot-mic moment where he used an expletive and may have disparaged Congress, a claim the president’s office has challenged.
Yoon’s comments went little noticed in the United States.
No mention of the letter was made on the White House website.
BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]
