SEOUL - South Korea views new US rules that favour American-made electric vehicles and batteries as a"betrayal," a senior official in Seoul said, an issue that threatens to complicate economic and security cooperation between the close allies.
South Korean President Yoon Suk-Yeol's government views the measure as unfair after a string of big US investment announcements by the country's companies, said the official, who asked not to be identified discussing internal deliberations. While Seoul hasn't decided to tie cooperation on the issue to other items on the US's economic agenda, that couldn't be ruled out, the official said.
"South Korea may consider the IRA like being stabbed in the back," said Mr Cheon Seong-whun, a former security strategy secretary under former conservative President Park Geun-hye."After putting in that much amount of investments, the South Korean administration, as well as its public, expected the same amount of economic benefits back from the US in the form of market accessibility.
"We take the Republic of Korea's concerns seriously and stand ready for serious consultations," Mr Jose W. Fernandez, undersecretary of state for economic growth, energy and the environment, said in a statement."We will have more details in the coming months as we begin the domestic rule-making process."
China's opposition to the move could blow back on South Korea's chip makers. The US law requires carmakers to assemble their EVs in North America to receive subsidies, but Hyundai doesn't yet have any operational electric car plants there. Meanwhile, all three of South Korea's main battery makers - LG Energy Solution, SK On and Samsung SDI - import most of their critical minerals from China.
South Korean Trade Minister Lee Chang-yang will also visit the US this month to lobby against the new measures, saying in August the legislation contains"details that would put a burden on our companies, raising concerns in South Korea, Germany and Japan, which are also exporting electric cars to the US".
Source: Energy Industry News (energyindustrynews.net)