Trade, Industry and Energy Minister Lee Chang-yang met with Philip S. Goldberg, United States Ambassador to South Korea, in Seoul on August 31 to congratulate his new appointment to the post and discussed future Korea-U.S. cooperation on current issues.

On the recently passed Inflation Reduction Act (IRA), Minister Lee relayed his agreement to general measures for climate change response and clean energy expansion. However, with regard to tax benefits for EV makers, he expressed serious concern on behalf of the Korean government and business sectors over discriminatory treatment between domestic and foreign carmakers in the U.S. market, calling for prompt resolution of the matter.

The Minister emphasized the following key points. He first conveyed that the U.S. move may be a violation of international trade and commerce rules. Second, he mentioned the deepening economic ties between the two countries in supply chain and high-tech areas, and the untimeliness of this discriminatory decision when Korea is making heavy investments in the U.S., which is expected to cause further negative consequences.

Minister Lee stressed that the two countries can settle the matter through sufficient communication, and urged U.S.’ active engagement in talks. As the Korean government delegation is currently visiting the U.S. for talks, and his own U.S. visit will follow in mid-September, the Minister stated that he looked forward to discussing the issue more in-depth with U.S. government officials and Congress members.

Discussions also covered the CHIPS Act (Creating Helpful Incentives to Produce Semiconductors for America Act), which enables maximum 25 percent investment tax credits to companies making new investments in U.S. semiconductor companies, and subjection of beneficiary companies to a “guardrails provision” stipulating that the “covered entity” shall not engage in any “significant transaction” involving the “material expansion of semiconductor manufacturing” in China or any other foreign country of concern for a 10-year period beginning on the date of a CHIPS Act award.

The Minister requested that the U.S. continuously communicate with Korea in the establishment process of subsections of this Act by the Department of Commerce (DoC), and maintained that the Supply Chain and Commercial Dialogue (SCCD), installed in May by the Ministry of Trade, Industry and Energy (MOTIE) and the DoC, should be utilized as their economic cooperation channel.

Lastly, he mentioned the importance of bilateral cooperation concerning Busan’s aim to win the bid for hosting World EXPO 2030.