Harris promises to address Seoul's concerns on IRA

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Thu, December 1, 2022 | 18:25

Harris promises to address Seoul's concerns on IRA

Posted : 2022-09-29 16:51

Updated : 2022-09-30 09:31

President Yoon Suk-yeol shakes hands with U.S. Vice President Kamala Harris during their meeting at the former's office in Yongsan District, Seoul, Thursday. Courtesy of the presidential office

Yoon, Harris reaffirm importance of ROK-US alliance

By Nam Hyun-woo

U.S. Vice President Kamala Harris said she will do her part to address South Korea's concerns about the U.S. Inflation Reduction Act (IRA), offering a silver lining to carmakers here who fear plunging U.S. sales stemming from the law that exempts subsidies on electric vehicles made outside of America.

According to deputy presidential spokesperson Lee Jae-myoung, Harris made those remarks during her 85-minute meeting with President Yoon Suk-yeol in Seoul, Thursday.

The two also shared their views on the importance of the Seoul-Washington alliance in deterring North Korea's intensifying nuclear and missile threats and the necessity of implementing a liquidity facility, which appears to refer to a currency swap between the two countries.

"During the meeting, Harris said that not only she but also President Joe Biden are well aware of South Korea's concerns about the IRA, and she said she will make efforts to address (Seoul's) concerns during the process of enforcing the law," Lee said.

The IRA offers a tax credit of $7,500 (10.8 million won) for U.S. consumers of electric vehicles (EVs) that fit a number of requirements, including: final assembly in North America, the sourcing of critical materials in batteries from the U.S. or countries that have free trade agreements with the U.S., and the manufacture and assembly of the battery components in North America, among others.

However, South Korean carmakers, including Hyundai Motor and Kia, are expected to suffer a hefty blow from the act as most of their EVs are manufactured in the South.

During his conversation with Biden in New York last week, Yoon voiced Seoul's concerns over the IRA, and the U.S. leader responded that the two countries should continue to hold consultations on this matter, according to the presidential office.

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As Harris showed positive reactions and dropped hints at cutting South Korea some slack, anticipation is growing that there could be some changes to subordinate regulations of the IRA or the offer of a quota to South Korean carmakers. And these measures could take place after the U.S. midterm elections in November, because Biden has touted the IRA as one of his biggest achievements so far in office.

An official at South Korea's presidential office said that the U.S. has "taken one more step" from the Yoon-Biden discussions last week, and the meeting was "an occasion that consolidates mutual trust and reaffirms common interests."

President Yoon Suk-yeol and U.S. Vice President Kamala Harris hold a meeting at the former's presidential office in Yongsan District, Seoul, Thursday. Courtesy of the presidential office

Also during the meeting, the two sides stressed the importance of the South Korea-U.S. alliance amid Pyongyang's escalating nuclear and missile threats.

During their opening remarks, Yoon said that the two countries' alliance is expanding beyond the Korean Peninsula into a global alliance to encompass the economic and technological spheres.

"The Republic of Korea-U.S. alliance is the linchpin that defends the freedom, security and prosperity of the Korean people, and I will do my utmost to further strengthen our alliance," Yoon said, adding that Harris' visit to Seoul will be "another turning point" in achieving those goals.

Harris also expressed her concerns about the North's recent launch of a ballistic missile and legalization of its use of nuclear weapons. She also reaffirmed Washington's ironclad security pledge to Seoul, according to the presidential office.

"For seven decades, the alliance between the United States and the Republic of Korea has been a linchpin of security and prosperity on the Korean Peninsula and in the Indo-Pacific and throughout the globe," Harris said during her opening remarks.

The two reaffirmed last week's agreement between Yoon and Biden that the two countries will cooperate closely to implement a liquidity facility to bolster financial stability if needed. A liquidity facility is a program to buy debt between South Korea and the U.S., and is a larger concept for a currency swap, which could be a useful tool to address the recent nosedive in the Korean currency's value.

Yoon and Biden also agreed that the two countries will hold consultations to arrange Yoon's visit to Washington next year, which will mark the 70th anniversary of the South Korea-U.S. alliance.

namhw@koreatimes.co.kr Article List