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| U.S. State Department spokesperson Ned Price speaks during a media briefing at the State Department in Washington, in this July 7, 2022 file photo. AP-Yonhap |
The United States is prepared to work with Korea and other countries to address their concerns over the U.S. Inflation Reduction Act (IRA), a state department spokesperson said Monday.
Ned Price also highlighted the need to keep offshore investment between Korea and the U.S. robust.
"Just as we have said with our European allies, this is a consequential piece of legislation. It's a complicated piece of legislation. It's a large piece of legislation," the department spokesperson said of the IRA when asked if there will be any immediate solution to the countries' concerns over the IRA.
"And so we are prepared to work with our allies and partners. In this case, of course, with the ROK, to talk about implementation of this legislation and ways we can work to take into account those concerns," Price added, referring to South Korea by its official name, the Republic of Korea.
The new U.S. law will, if implemented as it is, offer a government tax incentive of up to $7,500 on new electric vehicle (EV) purchases, but only to those who purchase a new EV assembled in North America.
Seoul, as well as many other car manufacturing countries, have expressed serious concerns that the law may violate the World Trade Organization regulation on national treatment, as well as bilateral or multilateral free trade agreements the U.S. has signed.
The Department of Treasury has offered some relief to the growing concerns late last year when it released a detailed guideline on the implementation of the IRA that will allow foreign-made EVs to be entitled to tax benefits when sold and used for commercial purposes.
Price said the issue will again be discussed between U.S. Under Secretary of State for Economic Growth, Energy and the Environment Jose Fernandez and his Korean counterparts.
"Two way investment, by two way I mean American companies investing in South Korea, South Korean companies investing in the United States, we want to make sure that two-way pipeline is as robust as we can accomplish and that's part of the reason why Under Secretary Fernandez is in Korea," he said.
Fernandez arrived in Seoul on Monday (Korea time).
His trip to Seoul comes after a senior official from Hyundai Motor, Korea's largest automaker, said the company may be forced to reconsider its investment in the U.S. if the IRA does in fact hurt its growth.
"And so as this continues to potentially hurt our growth, I think we will have no choice but to really reassess where we go," Robert Hood, vice president of government affairs at Hyundai Motor, said earlier.
Hyundai Motor is currently building its first EV plant in the U.S., along with an EV battery plant, both in Georgia. (Yonhap)
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