The South Korean parliament will consider whether new rules implemented by the U.S. in the Inflation Reduction Act regarding tax credits for electric vehicles violate the rules established by the World Trade Organization (WTO) and the two countries’ bilateral free trade agreement, Reuters reported Monday.
The massive climate and healthcare bill will end tax credits for 70% of 72 electric vehicles that used to qualify, as these cars are assembled in foreign markets, Reuters reported. South Korean Foreign Minister Park Jin spoke last week with U.S. Secretary of State Antony Blinken expressing concerns over the legislation, while Industry Minister Lee Chang-yang spoke to parliament about filing a complaint with the WTO on Monday, according to Reuters.
Korean carmaker Hyundai is considering whether it should accelerate its plans to construct an electric vehicle and battery production facility in Georgia, South Korean outlet Yonhap News Agency reported Monday. While the company originally planned on breaking ground in January 2023 with production beginning in the first half of 2025, it is considering accelerating the schedule by six months, targeting a production date in the second half of 2024, according to Yonhap, citing an anonymous source familiar with the matter.
The trade agreement between the two nations facilitates about $161 billion in trade per year, making South Korea the U.S.’s sixth largest trading partner, according to the Census Bureau. The U.S. is Korea’s second largest trading partner, according to the Observatory of Economic Complexity.
Korean vehicle imports represent $21 billion of trade between the two nations, and are the largest Korean import into U.S. markets by $6 billion, followed by machinery, according to the Office of the United States Trade Representative.
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Check out the new cooperation of @motionaldrive and @lyft 👇#Hyundai https://t.co/6rghoqQsrW— Hyundai Worldwide (@Hyundai_Global) August 18, 2022
Hyundai, alongside subsidiary Kia, is expected to unveil at least 31 models of electric vehicles by 2030, Yonhap reported. The conglomerate is the fifth largest car maker in the world, and is aiming for a market share of 12% of the global electric vehicle market, according to Yonhap.
Japanese and American lobbying groups have also signaled distress about the new law, with the American group Alliance for Automotive Innovation fearing that restrictions on mineral and battery sourcing will render even American-made electric vehicles ineligible, Reuters reported.
“We will keep a close watch on future developments and will consult and consider how to respond to them in cooperation with the government,’ a Japan Automobile Manufacturers Association (JAMA) spokesperson told Reuters. JAMA represents a variety of popular brands, such as Honda, Toyota, Subara and Nissan.
Hyundai was recently fined $19 million by the U.S. Consumer Financial Protection Bureau for inaccurately reporting the credit of 2.2 million customer accounts, paying damages of $13.2 to customers alongside a $6 million fine despite admitting no wrongdoing, the Wall Street Journal reported.
Hyundai, the Embassy of the Republic of Korea in the USA, the Office of the United States Trade Representative and the White House did not immediately respond to the Daily Caller News Foundation’s request for comment.
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