US-EU Trade Chiefs Meet... "To Continue Discussions on Electric Vehicle Tax Credit Proposal"

Katherine Tai, United States Trade Representative (USTR) Photo by Yonhap News

[Asia Economy Reporter Jeong Hyunjin] As South Korea and other allies engage in diplomatic efforts regarding the U.S. Inflation Reduction Act (IRA), which grants tax credit benefits only to electric vehicles produced in North America, the U.S. and the European Union (EU) trade representatives held a meeting.

According to major foreign media on the 14th (local time), the U.S. Trade Representative (USTR) announced that Representative Katherine Tai met with Valdis Dombrovskis, the EU Executive Vice President for Trade, in Germany and "agreed to continue discussions on the electric vehicle tax credit under the IRA." Representative Tai visited Germany for the two-day G7 Trade Ministers' Meeting held on the 14th and 15th.

The specific details of the meeting were not disclosed. However, since the EU, like South Korea, has expressed the position that the IRA conflicts with World Trade Organization (WTO) regulations, it is presumed that concerns were raised to the U.S. side about potential disadvantages for European-made electric vehicles.

The IRA, signed last month by U.S. President Joe Biden, stipulates that only electric vehicles produced in the U.S. and using batteries and critical minerals manufactured in North America above a certain percentage are eligible for tax credits of up to $7,500. If this law is implemented as originally planned, electric vehicles manufactured in other countries such as South Korea and the EU will not be able to receive these benefits.

Earlier, on the 13th, Ahn Deok-geun, Director General for Trade Negotiations at the Ministry of Trade, Industry and Energy, stated at a briefing at the Government Sejong Complex that South Korea and the U.S. would hold a bureau-level working consultation later this week to discuss the details regarding the IRA issue. Director General Ahn added that he plans to meet separately with Representative Tai during the upcoming G20 Trade Ministers' Meeting next week to continue consultations.

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