The Korean government has sent an official letter to the United States in regard to the Inflation Reduction Act.
The letter notes that the Inflation Reduct Act and the Clean Energy Tax Incentive will hurt foreign manufacturers of electric vehicles such as those from Korea. Additionally, the letter states that the act may interfere with trade regimes such as the World Trade Organization and the bilateral free trade agreement.
“On Friday, the government sent a letter on its stance on the Clean Energy Tax Incentive under the IRA (to the U.S.),” Korea’s Ministry of Trade, Industry, and Energy confirmed in a statement.
Korea’s ministry spoke with officials from various industries before preparing the letter, including those from the automobile, battery, materials, energy, and steel sectors. Local trade minister Ahn Duk-geun also recently held virtual talks with a senior advisor to President Biden for clean energy, John Podesta, to explain Korea’s stance on the act.
Read: U.S. Will Look Into How Inflation Reduction Act Hurts South Korean Carmakers
The letter is the latest move from Korea to express its concerns about the act. It is particularly concerned that missing out on the $7,500 maximum EV tax credit will adversely impact the Hyundai and Kia brands and see them lose market share in the United States.
Korea Times reports that the country has been busy preparing legal disputes with the United States over the Inflation Reduction Act. It is understood the automaker has hired a domestic law firm and is working with an international one to file complaints with the World Trade Organization or the Korea-U.S. Free Trade Agreement.
The country’s Industry Minister Lee Chang-yang recently said that South Korea will attempt to resolve the matter through bilateral talks with the U.S. and says taking legal action remains “a last resort.”
