Republican strategy 'response' to US Democrat policy in the Inflation Reduction Act

Although the US Biden administration's Inflation Reduction Act is an eco-friendly policy based on tax increases for large corporations, South Korea responded to electric vehicle subsidies with preferential treatment for subsidies in violation of trade and adopted the US Republican hardline remuneration strategy.
On the 18th, a government official Yoon Seok-yeol said, "In connection with the enforcement of the US Inflation Reduction Act, we are pushing to send high-ranking officials above the vice-ministerial level directly to the US." announced plans for an interview.
At the National Assembly on the 16th, Foreign Minister Park Jin said, “The Korea-US FTA has the principle of national treatment, and the WTO rules have the principle of most-favored-nation treatment. There may be potential violations of these principles. It is true that there are concerns in the Korean industry about the electric vehicle subsidy reform plan,” he said. We plan to discuss countermeasures,” he said.
Rep. Won-wook Lee (Democratic Party) at the National Assembly on the same day proposed a resolution calling for a ban on discrimination in tax support for imported electric vehicles and batteries in the United States in response to the “US Inflation Reduction Act.”
The resolution said, “The United States must include Korean electric vehicles in the subject of tax credits and comply with international regulations such as FTAs. The government should actively negotiate with the US government so that Korean companies are not discriminated against in the US market.”
The U.S. started raising $790 billion in corporate tax increases for large corporations with the Inflation Reduction Act taking effect on the 16th.
In accordance with the US Democratic Party's Inflation Reduction Act, consumer subsidies are used to subsidize electric vehicles assembled and produced in the United States, and South Korea's export electric vehicles are excluded from consumer subsidies.
The Yoon Seok-yeol government requested the US administration to ease subsidy requirements under the Inflation Reduction Act before the bill went into effect, and on the 23rd after the bill went into effect, Minister of Commerce, Industry and Energy Lee Chang-yang announced on the 19th that he would hold an 'emergency meeting' with domestic automakers and battery makers that produce electric vehicles.
A government official said, "Our executives met with USTR executives and delivered a letter containing the government's concerns," a government official said.
The Inflation Reduction Act stipulates that electric vehicles manufactured and assembled in North America are subject to consumer subsidies, which are supplied by the United States or countries that have signed free trade agreements with the United States, and use more than 50% of battery components.
The Biden administration's inflation reduction law, which focuses on raising $790 billion from tax hikes for large corporations, is 80% of the budget, or $386 billion, for eco-friendly energy support, climate change response costs, and electric vehicle subsidies.
Prior to the enactment of the U.S. reduction law, the consumer subsidy for electric vehicles was applied to only 200,000 units from the annual sales volume by company, and with this law, it was converted to consumerism.
As a policy of recommending eco-friendly electric vehicles rather than internal combustion engine vehicles, the United States has set a consumer subsidy of up to $7,500 per new electric vehicle purchaser.
The U.S. Democratic government considered the cutoff of the supply of fossil fuels such as oil and natural gas and the surge in consumption as the main culprits of inflation due to the Ukraine war, and tried to lower the proportion of fossil fuels through energy diversification by supporting eco-friendly energy companies. The goal is to reduce energy prices and expand medical support.
When President Joe Biden signed the Inflation Reduction Act on the 16th, the subsidies for electric vehicles announced at the time of the signing of the Inflation Reduction Act on the 16th were Hyundai Motor Group's Ioniq 5, Kia EV6, and all five electric vehicle models sold in the US by domestic automakers. had nothing to do with
The Yun Seok-Yeol administration adhered to the economic stimulus strategy through the Republican Party's tax cut policy and excluded the energy conversion policy for eco-friendly companies.
According to Democratic policy, the Biden administration announced earlier that it would reduce the $790 billion large corporation tax that would be generated by this cut, including $484 billion in climate change response ($386 billion), medical assistance ($98 billion) and cut the fiscal deficit by $305 billion.
At the Korea-US summit in May, Hyundai Motor Group announced US direct investment of US$10.5 billion to President Biden.

The Wichita Eagle, a local newspaper, reported on the 23rd of last month that Hyundai Motor's investment in the construction of an electric vehicle battery plant in Georgia received a total of $1.8 billion in tax benefits.

The newspaper said that the US electric car maker Rivian received $1.5 billion in tax aid from Georgia, the largest by Hyundai.

In order to receive electric vehicle subsidies from the US government in the future, it is highly likely that Hyundai Motor Group will need to quickly inject more funds into the US than the previously promised investment amount, Money Today reported on the 18th.
Chairman Chung Eui-sun met with President Biden at the time and formalized the investment of US$5 billion in robotics and US$5.5 billion in electric vehicle-only factories in Georgia by 2025.
An anonymous trade expert said on the 18th, "The subsidy policy that the US unilaterally protects its own industry may violate not only NT (national treatment) and MFNT (most-favoured country treatment) regulations, but also the provisions of the WTO subsidy agreement." We should also consider filing a complaint with the organization,” he told Money Today.
Reagannomics, the Republican Party's tax cut policy and supply advantage strategy, expanded the hard-line compensation of blocking congressional checks by signing international agreements with weaker countries as a means of evading domestic environmental laws and neutralizing state laws. Officials and political parties attempted to neutralize the US Democrats with an FTA.
The Korean government legally responds to the US Democrats in accordance with the international trade principle of national treatment (NT, National Treatment, equal treatment to other nationals) and the most-favored country treatment (MFNT, Most Favored Nation Treatment, same applies to specific countries) with respect to environmental support policies. started