South Korean President Yoon Suk-yeol asked US President Joe Biden to help address Seoul’s concerns that new US rules on electric vehicle subsidies will hurt the country’s automakers, Yoon’s office said on Thursday.
Seoul’s opposition to the US Inflation Reduction Act (IRA), signed by Biden last month, has overshadowed Yoon’s first trip to the United States since taking office in May.
The new law eliminates federal tax credits for electric vehicles (EVs) made outside North America, meaning companies like Hyundai Motor Co (005380.KS) and its affiliate Kia Corp (000270.KS) will no longer be eligible.
Yoon relayed the concerns to Biden in London, where both leaders attended the funeral of Britain’s Queen Elisabeth, and again in New York on Wednesday on the sidelines of the UN general Assembly, his office said.
“President Yoon requested close cooperation so that the US administration can resolve our concerns in the process of enforcing the Inflation Reduction Act,” Yoon’s office said in a statement.
Biden said he was “well aware” of South Korea’s concerns and asked to continue discussions, it added.
The White House said the two leaders discussed a broad range of issues including supply chain resilience, economic and energy security and climate change, but did not mention electric vehicle credits.
Seoul sees the IRA as a betrayal of Biden’s vows to boost economic ties after South Korean companies unveiled bold investment plans in the United States.
The US Commerce Department earlier hinted at tensions between the two countries after a meeting between US Commerce Secretary Gina Raimondo and South Korea’s trade minister Lee Chang-yang in Washington on Wednesday.
The pair “exchanged frank views on US concerns about South Korea’s pending legislation to impose network usage fees on foreign content providers and South Korea’s concerns relating to electric vehicle tax credits,” it said.
In South Korea, there is a legislative push to require overseas content providers including Netflix (NFLX.O) and Alphabet’s Google (GOOGL.O) to pay local network fees.
Seoul’s trade ministry said Raimondo sympathised with Seoul’s concerns on the IRA and vowed to continue consultations.
“Our side clearly conveyed the concern that the (IRA) does not match the US drive for supply chain cooperation and would bring a negative impact on future projects,” it said in a statement.