South Korean and U.S. officers are working towards a “concrete proposal” to resolve their variations over electrical automobile subsidies, South Korea’s commerce minister informed CNBC.

“We have established a selected dialogue channel to handle this specific concern, and we’re glad that the U.S. authorities wholeheartedly engaged with us to rectify the issues,” Ahn Duk-geun informed CNBC’s Chery Kang on Wednesday.

He was referring to considerations over EV subsidies that will put South Korean automakers at a drawback, with some South Korean officers calling the transfer a “betrayal” of the bilateral belief between the 2 nations.

The $430 billion local weather and power invoice, or the Inflation Discount Act (IRA), was signed into regulation by President Joe Biden in mid-August.

It consists of federal tax credit providing customers as much as $7,500 in credit score for these buying new electrical autos assembled within the U.S. – and people buying vehicles made by international carmakers like Kia and Hyundai won’t be eligible.

Hyundai is the second-biggest EV sellers within the U.S. after Tesla.

“We’re upset to see specifically this provision [was] included within the IRA with out a lot prior consultations,” Ahn stated, including the South Korean authorities is getting ready for “all potentialities,” together with proposing legislative amendments to Washington.

His remark weren’t as robust because the heated rhetoric from Seoul officers in current weeks.

U.S. Vice President Kamala Harris was in Seoul on Thursday the place she met South Korea’s President Yoon Seok-yeol, to debate the considerations confronted by South Korean automakers.

A White Home readout following the 2 leaders’ assembly stated the U.S. vice chairman understood the raised considerations and that each pledged to “proceed to seek the advice of” on the matter.

Yoon’s workplace cited Harris as saying she would “look into methods to alleviate South Korea’s considerations within the means of implementing the regulation,” in line with an announcement on the identical assembly.

South Korean and European officers have stated the tax credit score provisions within the IRA are a breach of guidelines beneath the World Commerce Group, Reuters reported.

South Korea’s business ministry confirmed with CNBC that Seoul might be reviewing whether or not to file a proper criticism to the WTO over such considerations.

Final week, the Korean Confederation of Commerce Unions, which represents employees from South Korean home corporations together with Kia and Hyundai, slammed the U.S. measures as “unilateral” and “U.S.-centric,” and stated they may worsen the uncertainties surrounding the present state of the worldwide financial system.

Ahn famous that South Korea’s export-reliant financial system is certainly “experiencing the decoupling phenomenon” on account of heightened U.S.-China commerce tensions. He didn’t elaborate additional.

South Korea is dealing with a continued commerce deficit downside resulting from an increase in power costs, and that Beijing holds a strategically vital function for the nation, he added.

“China continues to be [a] essential buying and selling companion of Korea,” Ahn stated.

“I feel the stabilization of this commerce relationship will play an important function to safe the worldwide provide in these turbulent and unsure financial circumstances.”