President Joe Biden has reached out to South Korean President Yoon Suk-yeol, signaling his willingness to continue negotiations with the country regarding the recently passed Inflation Reduction Action that prevents most foreign automakers from receiving tax credits for electric vehicles.
According to an official from the Office of the South Korean President, Biden offered assurances in a “personally signed letter.” Last month, Yoon asked Biden for help finding a way to prevent the restrictions from impairing South Korean companies, and to quell criticism from officials in Seoul.
The letter comes after Yoon and Biden met during the South Korean President’s visit to New York last month. Although there was no formal summit, the Presidential office reported at the time that Biden had conveyed his appreciation for Seoul’s concerns and that he would continue talks on the issue.
“We assess that President Biden reaffirmed his understanding of our concerns through a personally signed letter,” the official said. “It shows Biden’s willingness to be considerate towards South Korean companies in the future.”
South Korea’s concerns center on legislation that requires EVs to be assembled in North America to qualify for tax credits in the US, ultimately denying subsidies to Hyundai Motor Co. and Kia Corp., as neither company manufactures vehicles inside North America.
The result of the restrictions is that only about 20 EV models currently qualify for subsidies under the new law, including vehicles from Ford Motor Company and BMW.
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