Concerns Expressed Regarding the Inflation Reduction Act
[Asia Economy Reporter Jinju Han] On the 5th, National Assembly Speaker Kim Jin-pyo met with a delegation from the U.S. House of Representatives visiting Korea and emphasized concerns about the U.S. Inflation Reduction Act (IRA) along with the need for amendments and improvements.
During the meeting with the House members at the National Assembly reception room, Speaker Kim said, "If Korean conglomerates do not receive subsidies and their stock prices fall, the large-scale investment in the U.S. promised to President Joe Biden during the Korea-U.S. summit could be delayed."
He continued, "According to the Korea-U.S. FTA (Free Trade Agreement), both countries are to grant each other most-favored-nation treatment in trade, and to develop into an economic and value alliance, it is necessary to amend and supplement the Inflation Reduction Act."
The Inflation Reduction Act provides tax credit benefits only for electric vehicles that are finally assembled in the North American region, which means Korean-made electric vehicles cannot receive subsidy benefits of up to $5,700 per vehicle.
Speaker Kim stated, "Hyundai and Kia currently do not have electric vehicle production plants in North America, so until the Georgia plant in the U.S. is completed in 2025, they cannot receive subsidy benefits under the Inflation Reduction Act, which is expected to result in an annual loss of 600 billion won."
While highlighting the importance of the Korea-U.S. alliance, Speaker Kim also proposed regularizing and operating exchange and cooperation channels among lawmakers in the military and diplomatic fields of both countries' parliaments.
He said, "Over the past 70 years, the Korea-U.S. alliance has played a central role not only in the Korean Peninsula but also in global peace and prosperity. Now, as a comprehensive and global strategic alliance, the scope of cooperation is expanding to economic, science, and technology fields that will influence the future strategic environment."
U.S. Representative Stephanie Murphy from Florida responded, "It is rare to find an alliance as strong and historic as the Korea-U.S. alliance," and added, "Let us continue to strengthen relations in various areas such as security, supply chain stability, and investment."
Attending the reception were U.S. House members Stephanie Murphy, Scott Franklin, Kai Ali Kahele, Joe Wilson, Andy Barr, Darrell Issa, Claudia Tenney, and Kat Cammack, all members of the U.S. House Armed Services and Foreign Affairs Committees, as well as Philip Goldberg, U.S. Ambassador to Korea. On the Korean side, National Assembly Foreign Affairs and Unification Committee Chairman Yoon Jae-ok, National Assembly Defense Committee Chairman Lee Heon-seung, National Assembly Culture, Sports and Tourism Committee Chairman Hong Ik-pyo, Democratic Party members Hwang Hee and Kim Byung-joo, People Power Party member Shin Won-sik, National Assembly Secretary-General Lee Kwang-jae, Speaker’s Secretariat Chief Park Kyung-mi, Public Relations Chief Secretary Ko Jae-hak, Public Relations Planning Officer Jeong Hwan-cheol, and International Affairs Director Hwang Seung-gi were present.
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