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| South Korean President Yoon Suk Yeol speaks while standing alongside U.S. President Joe Biden during a press conference held after a summit at the White House in Washington, D.C., Wednesday (local time). Joint Press Corps |
By Baek Byung-yeul
President Yoon Suk Yeol and his U.S. counterpart Joe Biden held a summit in Washington, D.C., Wednesday (local time), where U.S. laws aimed at scrapping tax credits for electric vehicles not made in North America and curbing China's power in the global IT market, were on the agenda.
But Yoon failed to draw concessions from Biden on the Inflation Reduction Act (IRA) and the CHIPS and Science Act that could help Korean companies investing in the U.S., according to experts, Thursday.
There have been concerns from South Korean companies over the IRA and CHIPS Act subsidy programs, which require the South's businesses to make more investments in the U.S. while keeping a distance from China.
The experts pointed out that Yoon came up empty-handed when he should have been more specific about South Korea's position. The experts said they had hoped for a solution that would make the CHIPS Act and the IRA more beneficial to South Korean companies or at least buy time for local businesses to slowly reduce the scale of their operations in the Chinese market.
"As a country that exports more to China than it does to the U.S., South Korea needs to have a good exit strategy, and I didn't see that at the summit," Kim Dae-jong, a professor of business administration at Sejong University, said.
Kim Yang-paeng, a senior researcher at the Korea Institute for Industrial Economics and Trade (KIET) said he had hoped that the summit would result in some benefits for South Korean companies facing restrictions in business activities in China due to the CHIPS Act.
"So far, nothing has come out of the summit that will help South Korean companies. The legislation that the U.S. is implementing is intended to keep China in check, which will also hurt South Korean companies, and I don't think our position on that has been clearly communicated," the researcher said. "As the U.S. clearly states its position, I wish we had done more to express the position of our companies and industries."
After having a summit at the White House, the leaders told reporters that they agreed to coordinate closely on the two laws.
"President Biden said that he will give special support and consideration to the investment and business activities of South Korean companies in particular," Yoon said.
Biden also said, "I don't think, so far, most of the South Korean companies believe that there's somehow a ― a U.S. effort to slow them down, prevent their growth, or anything like that. We'd like to see them grow. And ― and I mean that sincerely."
However, other experts said it is unfair to say that the summit failed to achieve economic benefits for Korea, since the meeting focused primarily on security cooperation.
"The achievement of President Yoon's visit to the U.S. is to solidify the security relationship with the U.S. We have been overlooking the importance of the design side of chips because there are companies that mass produce chips rather than design them, but we should not forget that chips were originally developed for military purposes," Kyung Hee-kwon, an associate research fellow at Korea Institute for Industrial Economics and Trade (KIET), said.
"The U.S. has shown sensitive reactions because there has been a history of Chinese attempts to steal its chip technology. While we can agree that the U.S. is abusing its power to oppress South Korea, the CHIPS Act and the IRA have given South Korean tech companies a moment of respite from China's pursuit," the researcher added.
Kim at KIET also said that economic issues cannot take precedence over security issues, while Yoon's state visit to the U.S. should be seen as a step toward strengthening the security alliance between South Korea and the U.S. against Russia, China and North Korea.
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