U.S. and South Korea are Working to ‘Rectify the Problems’ on EV Subsidies

South Korean and U.S. officials are working toward a “concrete proposal” to resolve their differences over electric vehicle subsidies, South Korea’s trade minister told CNBC.

“We’ve established a specific dialogue channel to address this particular issue, and we are glad that the U.S. government wholeheartedly engaged with us to rectify the problems,” Ahn Duk-geun told CNBC’s Chery Kang on Wednesday.

He was referring to concerns over EV subsidies that would put South Korean automakers at a disadvantage, with some South Korean officials calling the move a “betrayal” of the bilateral trust between the two countries.

The $430 billion climate and energy bill, or the Inflation Reduction Act (IRA), was signed into law by President Joe Biden in mid-August.

It includes federal tax credits offering consumers up to $7,500 in credit for those purchasing new electric vehicles assembled in the U.S. – and those purchasing cars made by foreign carmakers like Kia and Hyundai will not be eligible.