U.S. President Joe Biden said in a letter to his South Korean counterpart Yoon Suk-yeol that he understands that the South Korean government is concerned about the Inflation Reduction Act (IRA), adding that he will stay involved in discussions from an open-minded and candid perspective, according to the South Korean presidential office on Wednesday. Senior presidential secretary for press affairs Kim Eun-hye commented that President Biden’s letter intends to consider South Korean businesses. Meanwhile, the U.S. Department of the Treasury announced that it would initiate a public comment period to help define the enforcement procedures of the IRA in detail. This only draws attention to whether any action will be taken to mitigate the controversy over obviously discriminative actions against South Korean EVs.
From a diplomatic viewpoint, President Biden’s letter sent to Seoul is an awkward communication between the allies, given that the two heads of state can talk on the phone no matter when. In response, the comment may have come from a series of political efforts to calm down the controversy of the “diplomatic missteps” as criticized by the opposing Democratic Party of Korea. Added to this, the message does not seem clear enough because it does not provide any specific solution or guide that will help find the right way to go. Nevertheless, we need to wait and see what action will be taken as the next step because it is the U.S. president as way of expressing his intent in person.
There is a growing consensus among experts within the South Korean administration and outside that the Biden administration has shifted its approach to the issues brought up by Seoul from merely showing an understanding of its concerns to working to find solutions. This has been faced with increasing public concern about any negative impact on Washington’s relationship with allies across the nation. The Wall Street Journal also reported that the IRA has only made Asian and European allies angry, increasing tension across the network of alliances against China.
Besides, the U.S. Department of Treasury will deal with some controversial items of the IRA, which may stack the cards against South Korea, such as the geographical range of “North America” and the definition of “final assembly,” during the public comment period scheduled until the end of the year before the IRA goes into effect. It is questionable how much leeway the administration can have to take a flexible approach during the enforcement process without any revision to the IRA to be made by the legislative body. On our end, there should be government-level efforts via various channels, including the Korea-U.S. consultative body, to request that the act be corrected so that our opinions can make as great a difference as possible.
With the U.S.-China Strategy Competition growing into an across-the-board power struggle, the Biden administration has emphasized strong bonds with its allies and friends to keep China in check. Although the forthcoming midterm elections may make it hard to resist the rise of "America First” across the nation for some time, President Biden will not likely sit on his hands while allies turn their back on Washington. We are not supposed to make any hasty conclusion due to Washington's promise to "consider South Korea.” As part of our countermeasures against any possible protectionist action by Washington, we also need to respond in principle to any violation of the rules set by the World Trade Organization and the Free Trade Agreement.