Yoon’s US visit to test Biden’s trust as ally over chip, battery issues

South Korean President Yoon Suk Yeol’s summit meeting with his US counterpart Joe Biden next month will celebrate 70 years of the Korea-US security alliance, their spokespeople said on Wednesday.

The first state visit to the US by a Korean president since 2011, as Seoul’s presidential office put it, however, will go beyond military strategizing over North Korea and China. It will also put Yoon’s economic and business acumen to the test, analysts said.

The summit, scheduled for April 26, will become a litmus test for Biden’s “unwavering commitment” to one of its key allies over tricky issues involving the CHIPS and Science Act and the Inflation Reduction Act.

While meeting with Korean correspondents in Washington D.C. on Tuesday, Kim Sung-han, Korea’s national security adviser, said that the Biden administration’s tax incentives and subsidies for chipmakers and battery manufacturers are among the agenda items for the summit.

“Both sides, through close consultation, will seek ways to limit the potential for Korean companies to face unfair treatment or uncertainty arising from the implementation of the US government’s industrial policies,” he told reporters.

The two allies will also explore new growth opportunities in advanced tech sectors such as space and cybersecurity as well as establish stable supply chains across industries, he said.

CHIPS ACT CAUSES JITTERS

Samsung Electronics Co. and SK Hynix Inc., the world’s two largest memory chipmakers, have been jittery about the Biden administration’s “Chips for America” program, which comes with tough conditions for foreign recipients.

In return for $39 billion in chip subsidies, the US government is explicitly demanding business information, even industrial secrets, from foreign firms seeking tax benefits.

“We understand the US government is also concerned about the CHIPS Act’s negative repercussions on its allies, including Korea and Taiwan,” said an official at Seoul’s presidential office.

The IRA, which went into effect last August, is aimed at diminishing China’s power in the global electric vehicle market but is generating headwinds for Hyundai Motor Co. and Kia Corp., which make most of their EVs in Korea and export them overseas.

Industry watchers said the US government may announce some measures to limit the negative impact of the act on its foreign partners when it unveils the IRA implementation guidelines later this month.

SAMSUNG, HYUNDAI, SK, LG TO ACCOMPANY YOON

Ahead of the US trip, President Yoon will visit Japan this month to hold talks with Prime Minister Kishida Fumio to ease strained bilateral relations between the two countries. His summit with Fumio will be marked by economic issues as well as sensitive topics such as wartime atrocities and forced labor, his aides said.

His Tokyo trip will be accompanied by Samsung Group leader Jay Y. Lee and Shin Dong-bin, chairman of Lotte Group, which runs business operations in both countries, people familiar with the matter said.

Sources said Yoon’s state visit to the US will be accompanied by a much larger economic delegation than the Japan trip, similar to that of the Korean president’s trip to the United Arab Emirates in January with an entourage of businesspeople from about 100 companies.

“In the past, business leaders from the top 10 conglomerates, including Samsung, Hyundai, LG and SK, all joined the economic delegation. It won’t be much different this time,” said an official at the Korea Chamber of Commerce and Industry.

An official at Seoul’s presidential office said this US visit, no matter the size of the economic delegation, will focus on semiconductors, software and biotechnology.

In the US, the president is also planning to meet with chief executives of major US companies, such as Tesla Inc. and Microsoft Corp.

“Through the state visit, we aim to attract investments from US companies in Korea and create jobs here,” he said.

Write to Dong-Wook Jwa, In-Seol Jeong and Hyeong-Ju Oh at leftking@hankyung.com

In-Soo Nam edited this article.