V-P Harris pledges to consult S. Korea over electric vehicle subsidy concerns

The law also requires a percentage of critical minerals used come from the US or an American free-trade partner. PHOTO: UNSPLASH

TOKYO - United States Vice-President Kamala Harris told South Korea's prime minister on Tuesday that Washington will work to address Seoul's concerns over recently enacted electric vehicle (EV) subsidies that could disadvantage Asian automakers.

The US$430 billion (S$617 billion) Inflation Reduction Act enacted in August consists of a host of US President Joe Biden's priorities, including investments to roll back climate change and make Washington a world leader in the EV market.

Among the law's provisions are requirements that EVs be assembled in North America to qualify for tax credits.

The law also ends subsidies for other EV models and requires that a percentage of critical minerals used in those cars' batteries come from the US or an American free-trade partner.

Ms Harris, visiting Japan, met with South Korea's Prime Minister Han Duck-soo and "underscored that she understood (Korean) concerns regarding the Act's tax incentives for electric vehicles, and they pledged to continue to consult as the law is implemented", the White House said.

"The vice-president and prime minister discussed our shared work to address the climate crisis, including the historic investments made in clean energy under the Inflation Reduction Act," the White House added.

Mr Biden has sought to deepen business with South Korea as part of a bid to increase US manufacturing jobs and build a united front against China.

Korean officials see the new requirements as a betrayal, after South Korean companies agreed to make major investments and build factories in the US.

Heavily industrialised South Korea worries the new subsidies will set back Hyundai Motor and its affiliate Kia in the world's largest consumer market. Cars are South Korea's third-largest export. REUTERS

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