'IRA Subsidy Abolition Concerns' Amid Visit to Korea, US Kokomo Mayor Optimistic "Economic Environment Will Be Maintained"

Interview During Visit to Korea to Strengthen Cooperation with Korean Companies Including Samsung SDI

Tyler Moore, Mayor of Kokomo, Indiana, USA, is being interviewed by Asia Economy on the 18th at the Indiana Economic Development Corporation Korea Office in Jung-gu, Seoul. Photo by Huh Young-han

Samsung SDI and Stellantis are investing over 7 trillion won to build a battery joint venture factory in Kokomo, Indiana, USA. Meanwhile, the mayor of Kokomo has expressed a positive outlook on the sustainability of the US Inflation Reduction Act (IRA). It was also reported that local sentiment suggests that key figures, including Republican Senator Todd Young, who have strongly supported the IRA and the CHIPS Act, will not tolerate weakening of the legislation.

Tyler Moore, mayor of Kokomo, recently met with Asia Economy at the Korea office of the Indiana Economic Development Corporation located in Jung-gu, Seoul, and said, "Regarding the possibility of IRA subsidies being reduced or abolished, Kokomo is also heavily dependent on the electric vehicle and battery industries, so there are concerns," but added, "I am cautiously optimistic that the economic environment will be maintained." He plans to discuss strengthening cooperation with Korean companies operating in Kokomo, such as Samsung SDI and Soulbrain, during his visit to Korea.

Mayor Moore stated, "Looking at the candidates for the next government cabinet, it seems there will be no excessively extreme measures," and emphasized, "Especially since Republican lawmakers actively support incentives for advanced industry manufacturing and development in Indiana, Ohio, Illinois, etc., they will not allow investments in their constituencies to shrink."

Colin Lengke, director of the International Center at the Indiana Economic Development Corporation, who also visited Korea, said, "Senator Todd Young has played an important role not only in budget allocation but also in maintaining it stably," adding, "Since American companies are also benefiting from opportunities such as subsidies, withdrawing them would be harmful to the US as well." Senator Young represents Indiana and co-sponsored the CHIPS Act with the Democrats in 2022.

The US Senate currently holds 53 seats for the Republicans and 47 for the Democrats. To repeal a law in the Senate, 60 votes are required, and to amend a law, more than 50 votes are needed. If three or more Republican senators oppose reducing CHIPS Act and IRA subsidies, it is practically impossible to amend the IRA. This is why leaders in Indiana and the Kokomo area believe repealing the IRA will not be easy.

The first joint venture plant of Samsung SDI and Stellantis located in Kokomo is scheduled to begin operations next month. Once the second plant is completed, it will be able to produce batteries for 830,000 electric vehicles annually. The population of this city is about 59,000, but more than 2,800 people work at the Samsung SDI joint venture plant.

Collin Lengk, Director of the International Center at the Indiana Economic Development Corporation, is providing additional explanations while attending an interview with Tyler Moore, Mayor of Kokomo, Indiana. Photo by Huh Younghan

To foster harmony between Korean companies and local residents, Mayor Moore said, "We have started holding Korean culture workshops every month, and we are educating local small business owners to understand Korean entertainment, food, and culture," adding, "We want to create an environment where Koreans feel welcomed and can settle in well." He further said, "We are turning Kokomo into a small Korean ‘Kokorea.’ I hope this will serve as an opportunity for mutual communication not only commercially but also culturally."