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Thursday, November 30, 2023

Korea, U.S. agree to continue consultations over Inflation Reduction Act

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Korea’s Trade Minister Ahn Duk-geun, right, shakes hands with U.S. Trade Representative Katherine Tai ahead of their talks in Washington on Sept. 8. [YONHAP]


Korea and the United States have agreed to continue close consultations to seek solutions regarding a new U.S. law that excludes electric vehicles assembled outside of North America from tax incentives, Seoul’s trade ministry said Thursday.

The consensus was reached during telephone talks between Trade Minister Ahn Duk-geun and U.S. Trade Representative Katherine Tai the previous day, according to the Ministry of Trade, Industry and Energy.

The Inflation Reduction Act, signed by U.S. President Joe Biden in August, has caused concerns that Hyundai Motor and Kia will lose ground in the U.S. market as they make EVs at domestic plants for export to the U.S.

“During the meeting, the two sides vowed to continue consultations for various solutions regarding tax benefit issues for EVs through their working-level communication channel,” the ministry said in a release, noting that Seoul and Washington held working-level talks three times in October alone.

“The two sides also agreed to close cooperation over the course of the U.S. Treasury Department’s devising of related guidance,” it added.

Earlier this month, Washington began to seek public comment on the implementation of the act.

The top trade officials plan to continue talks next month on the sidelines of the Asia-Pacific Economic Cooperation meeting in Bangkok, the ministry said.