SEOUL– South Korea and the United States agreed Friday to make joint efforts to seek solutions regarding a new U.S. law that gives tax credits to buyers of electric vehicles assembled only in North America.

The consensus was reached during a meeting between Trade Minister Ahn Duk-geun and U.S. Trade Representative (USTR) Katherine Tai in Bali on the sidelines of the Group of 20 trade, investment and industry ministerial meeting, according to the Ministry of Trade, Industry and Energy.

The Inflation Reduction Act, signed by Biden in August, gives up to US$7,500 in tax credits to buyers of EVs assembled only in North America, sparking concerns that Hyundai Motor Co. and Kia Corp., the two major South Korean automakers, will lose ground in the U.S. market, as they make EVs at domestic plants for export to the U.S.

During the meeting, Ahn stressed the need for “joint efforts to come up with tangible results at an early date, as the two sides launched a consultation channel on the matter.”

Tai shared the stance and vowed to strive to explore solutions based on the mutual understanding of their difficult policy circumstances, the ministry said.

Ahn and Tai met two weeks after their bilateral meeting in Washington, as the Seoul government has gone all-out to minimize the negative impacts of the IRA on domestic carmakers.

To discuss the matter, the two sides launched working-level talks last week.

Source: Yonhap News Agency