Former FKI Chairman Huh Chang-soo Sends Letter to Biden Requesting Exemption from Inflation Reduction Act

Sent Letter to Five Key Departments Including Commerce and Treasury with Biden
Concerns Over Hindering Electric Vehicle Market Development and Rising Costs for US Consumers

Huh Chang-soo, Chairman of the Federation of Korean Industries. / Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Han Ye-joo] Huh Chang-soo, chairman of the Federation of Korean Industries (FKI), sent a letter to U.S. President Biden expressing concerns about the damage the Korean automobile industry may suffer due to the passage of the Inflation Reduction Act (IRA) and requesting exemption from discriminatory measures.

On the 1st, Chairman Huh stated in the letter, "There is great concern about the damage Korean companies will suffer due to discriminatory measures against Korean-made electric vehicles under the Inflation Reduction Act. This will hinder the development of the electric vehicle market, which is still in its early stages, reduce supply, and increase costs for American consumers. As a strengthened ally following the May Korea-U.S. summit and a founding member of IPEF, Korea’s industrial sector, which plays a key role in U.S. global leadership, requests the suspension of this measure."

He further expressed concern that the measure "does not align with the spirit of the Korea-U.S. FTA and WTO subsidy principles, and may undermine the investment capabilities of Korean companies that are building electric vehicle plants in the U.S., contributing to achieving the U.S. carbon reduction goal of over 50% by 2030 and creating large-scale jobs."

The Inflation Reduction Act, which allocates $740 billion (approximately 1,000 trillion KRW) for climate change response and other efforts, stipulates that tax credit benefits are only given to electric vehicles finally assembled in North America. As a result, Korean-made electric vehicles currently sold in the U.S. are excluded from benefits of up to $7,500 (approximately 10 million KRW) per vehicle. This is expected to cause an annual export loss of over 100,000 vehicles due to reduced price competitiveness.

The FKI sent the above letter not only to President Biden but also to five key U.S. departments including the State Department, Department of Commerce, Treasury Department, Environmental Protection Agency, and Department of Energy; members of the U.S. Congress; four Korean-American House representatives including Michelle Park Steel and Young Kim; and major leaders such as governors and state legislators of states with large Korean company investments including Georgia, Alabama, and Michigan.

Chairman Huh has actively engaged in private diplomacy by sending letters urging the amendment of Section 232 of the Trade Expansion Act to U.S. political and business circles and making recommendations during meetings with key figures, utilizing the FKI’s recognition and network in the U.S. whenever issues closely related to Korean industry arise.

The FKI plans to continue joint responses with the U.S. business community, including the U.S. Chamber of Commerce, by utilizing the Korea-U.S. Business Council platform, the highest-level economic dialogue between the two countries, regarding the Inflation Reduction Act. At the upcoming Korea-U.S. Business Council General Assembly, co-hosted by the FKI and the U.S. Chamber of Commerce in Seoul this October, various measures including joint statements will be explored to minimize the damage to Korea. This 34th General Assembly will be the first in-person meeting in three years since the COVID-19 outbreak, inviting high-level government officials and business leaders from both countries to discuss the Inflation Reduction Act, economic security, IPEF and Chip4, Korea-U.S. currency swap, and other current issues.

This content was produced with the assistance of AI translation services.