logo
Industry minister nominee pushes Korean take on US Inflation Reduction Act

Industry minister nominee pushes Korean take on US Inflation Reduction Act

Korea Herald15-07-2025
Kim Jung-kwan calls for bold industrial policy to match US, China as tech rivalry intensifies
Kim Jung-kwan, the first nominee for industry minister under the Lee Jae Myung administration, has pledged to introduce a production-linked tax incentive system for key industries such as semiconductors and batteries, modeled after the US Inflation Reduction Act.
In a written response submitted to the National Assembly ahead of his confirmation hearing this week, Kim emphasized the need for aggressive government support that matches policies implemented by competing nations.
'It is time for strategic and proactive government-led industrial policies, including incentives that do not fall behind those of competing nations, in order to minimize trade risks,' Kim stated.
He noted that while semiconductors remain a core pillar of Korea's industrial and economic security, the country's leadership in memory chips is being challenged by Chinese and US firms, and its capabilities in logic chips remain relatively weak.
'We need bold semiconductor policies to strengthen our global leadership and stabilize our domestic manufacturing base,' Kim said, adding that tax and fiscal support for the sector will be expanded.
Addressing the battery sector, Kim acknowledged current difficulties stemming from a temporary slowdown in electric vehicle demand and the rapid rise of Chinese competitors. He said the government will consider introducing production tax credits for key minerals and materials to expand incentives for domestic manufacturing and strengthen the battery supply chain.
Kim's vision for production tax credits involves a system that offers tax deductions based on production volume, effectively functioning as subsidies linked to output. The US has implemented similar 'Advanced Manufacturing Production Credits' under the IRA to support strategic industries such as batteries, solar panels and clean fuels.
In Korea, companies operating in sectors designated as national strategic technologies, such as semiconductors and batteries, are currently eligible for one-time tax credits of up to 25 percent for facility and research and development investments. Unlike these investment-based incentives, Kim's proposed scheme would serve as a more direct benefit by offering tax credits on a portion of production costs.
If implemented, leading chipmakers Samsung Electronics and SK hynix are projected to receive annual tax reductions of between 4 trillion won and 5 trillion won ($2.9 billion and $3.6 billion).
President Lee had also pledged during his campaign to push for production tax credits of up to 10 percent for semiconductors. After taking office, he reportedly expanded the plan to include the battery sector, initiating internal reviews.
In his statement, Kim also vowed to expand the government budget for renewable energy.
'Expanding renewable energy is an urgent task for achieving carbon neutrality, enhancing energy security and creating new growth drivers,' he said, pledging to improve the overall environment for renewable energy deployment including identifying new project sites, securing grid connectivity and increasing public acceptance.
At the same time, Kim expressed support for nuclear energy, stressing the importance of a balanced energy mix of carbon-free sources to ensure a stable power supply and meet South Korea's greenhouse gas reduction targets under the Nationally Determined Contribution framework.
He also pledged to boost Korea's long-term technological competitiveness by developing Korean-style small modular reactors and next-generation nuclear fuels, while expanding exports of nuclear equipment and supporting small and mid-sized exporters in the sector.
On the issue of extended tariff negotiations with the US, set to conclude by Aug. 1, Kim said he would work toward a mutually beneficial outcome and use the talks as an opportunity to develop a bilateral manufacturing cooperation roadmap.
'In the face of US tariff measures and global supply chain shifts, I will do my utmost as Korea's 'export frontrunner' to strengthen our export competitiveness in key industries and open up new markets,' he said.
Kim, a former official at the Ministry of Economy and Finance, most recently served as head of marketing at Doosan Enerbility, a major power equipment builder. Since his nomination, he has divested all holdings in companies that could present potential conflicts of interest, including shares in Doosan.
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Lee to dispatch special envoys to Poland, Vietnam, Australia, Germany
Lee to dispatch special envoys to Poland, Vietnam, Australia, Germany

Korea Herald

time2 hours ago

  • Korea Herald

Lee to dispatch special envoys to Poland, Vietnam, Australia, Germany

President Lee Jae Myung will dispatch special envoys to Poland, Vietnam, Australia and Germany to deliver personal letters and discuss ways to expand bilateral cooperation, the presidential office said Friday. The envoys will depart consecutively starting Sunday and will meet with key officials in each country to convey Lee's message and explore opportunities to enhance friendly and cooperative ties, according to presidential spokesperson Kang Yu-jung. The delegation to Poland, comprised of Reps. Park Jie-won, Eeo Ki-kyu and Jin Sun-mee of the ruling Democratic Party, will leave on Sunday for a five-day visit. During their stay, they plan to meet with government and parliamentary officials to review the growing defense industry cooperation between the two nations and discuss ways to further develop their strategic partnership, Kang said. The Vietnam delegation will be led by former lawmaker Lee In-ki and include two additional DP lawmakers and will depart on Monday. The group will deliver Seoul's commitment to strengthening the comprehensive strategic partnership between the countries and will hold wide-ranging discussions on expanding practical cooperation particularly in infrastructure and energy. Former National Assembly Speaker Kim Jin-pyo will lead the Australian delegation, which is scheduled to leave on Monday for a four-day trip. The delegation will engage with Australian officials to discuss defense and defense industry ties, trade and supply chains and energy cooperation. The delegation to Germany will be headed by Lee Seog-yeon, a former minister of government legislation, and will depart on Wednesday. They plan to meet with German government officials to explore deeper cooperation in key sectors, such as manufacturing, digital transformation and artificial intelligence, as well as to exchange views on regional and global affairs. (Yonhap)

Agricultural items will be part of tariff talks: Seoul
Agricultural items will be part of tariff talks: Seoul

Korea Herald

time3 hours ago

  • Korea Herald

Agricultural items will be part of tariff talks: Seoul

Seoul's ongoing trade talks with Washington now encompass agricultural items, a high-ranking official of the presidential office said Friday amid growing speculations over what concessions Korea could make to reduce tariff threats on most goods exported to the US. 'Talks between Trade Minister Yeo Han-koo and his counterpart, US Trade Representative Ambassador Jamieson Greer, are now underway, and agricultural products are included in the list of items that are now being negotiated,' Kim Yong-beom, director of national policy at the presidential office, told reporters in a briefing Friday. Kim did not elaborate on which of the two countries' agricultural goods could be affected. Before Friday, South Korea's presidential office had not clarified whether its deal package would include the agricultural sector. When asked if a negotiation involving the agricultural sector would take place alongside tariff talks between South Korea and the US, presidential spokesperson Kang Yu-jung on Wednesday declined to answer the question, instead saying Seoul was "making its utmost effort to pursue national interest and find the best idea regarding tariff talks." This comes as Kim announced that President Lee Jae Myung's aides and senior government officials had discussed countermeasures over the outcome of Seoul's ongoing talks with Washington. Lee's aide Kim said the two countries "reaffirmed the importance of mutual cooperation in strategic manufacturing sectors, including shipbuilding and semiconductors, and decided to specify future cooperation measures," adding that Seoul "strongly requested" that Washington ease tariffs on individual items such as automobiles. Kim, however, added that he did not know whether a deal could be struck before the Aug. 1 deadline for the US "reciprocal" tariffs, but said that Seoul still considered that the deadline for making a deal. On Thursday, Industry Minister Kim Jung-kwan, Trade Minister Yeo Han-koo and their respective counterparts, US Secretary of Commerce Howard Lutnick and Greer of the USTR, held an 80-minute meeting to discuss tariff issues. The talks followed US President Donald Trump's announcement Tuesday that the US had reached a deal with Japan. The reciprocal tariffs on Japanese goods including cars, were reduced to 15 percent in return for Japan's $550 billion commitment to invest in the US. According to Kim, a follow-up negotiation between Industry Minister Kim and Lutnick will take place in the US on Friday, and Seoul will discuss countermeasures again Saturday.

Ministers of defense, unification, veterans affairs appointed
Ministers of defense, unification, veterans affairs appointed

Korea Herald

time5 hours ago

  • Korea Herald

Ministers of defense, unification, veterans affairs appointed

South Korea sees 1st civilian Defense Minister in 64 years; reinstated Unification Minister urges swift restoration of inter-Korean communication channel President Lee Jae Myung has appointed Ahn Gyu-back as the Defense Minister, Chung Dong-young as the Unification Minister and Kwon Oh-eul as the Veterans Affairs Minister, the presidential office announced Friday. Including the prime minister, this brings the number of confirmed Cabinet ministers in the Lee administration to 16 out of the total 20 as of Friday. Ahn, a five-term lawmaker of the ruling Democratic Party of Korea, said he would restore people's trust toward South Korea's military after the martial law crisis in December, during which national armed forces were deployed to the National Assembly. He added he would "not be bound by conventions and inaction" as the civilian leader of the Ministry of the National Defense. The new defense minister is a career politician who served as a member of the National Assembly's National Defense Committee from 2008 to 2025. He said he would navigate challenges faced by the South Korean military, such as a dwindling young population, the advancement of North Korea's nuclear and missile threat, heightened volatility in the geopolitical situation, and the fast-paced development of cutting-edge arms technologies, among others. He also stressed the need to achieve peace on the Korean Peninsula on the foundation of military strength. Chung, also a five-term lawmaker of the Democratic Party, visited Panmunjom, a village in the demilitarized zone in northern Gyeonggi Province, later on Friday. There, he called for a swift restoration of the communication channel between the two Koreas, as he inspected an inter-Korean emergency hotline in Panmunjom. The communication line has been cut off since April 2023. This is Chung's second time taking on the role of unification minister, having previously taken on the role from July 2004 to December 2005 under the late former President Roh Moo-hyun. Kwon vowed to boost support for veterans with low income and the bereaved families of war veterans, as well as increase rewards for the sacrifices veterans have made for the country, in his inaugural speech on Friday. Kwon was previously a conservative lawmaker from 1996 to 2008. As for the four remaining ministerial posts, Lee's administration awaits the confirmation hearing of two: Culture Minister nominee Chae Hwi-young and Land Minister nominee Rep. Kim Yun-duk. The nominees for education minister and gender equality minister recently dropped out due to controversies that grew over the course of their confirmation hearings.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store