US politicians urge review of ITC ruling over LG, SK battery dispute

The trade secret dispute between LG Energy Solution Ltd. and SK Innovation Co. is taking a new turn as US state politicians raise their voices against the recent US International Trade Commission (ITC) ruling, calling for a review of its impact on US President Joe Biden's green transportation goals.

Last month, the ITC ruled in favor of LG Energy in the trade secret infringement case for electric vehicle batteries. Under the final verdict, SK Group’s unit will be banned from importing some lithium-ion batteries and their components to the US over the next 10 years, making it almost impossible to run its battery plants in Georgia.

SK Innovation is currently constructing two battery plants in Georgia. The first plant is scheduled to begin operations in the first quarter of next year, with the second plant set to begin mass production in 2023. Over 3 trillion won ($2.6 billion) has been injected into the plant project.

Following the ITC ruling, members of the US political circle have stepped up to express concerns over the expected shutdown of SK Innovation's plants, stating that it could reduce battery supply in the US and take away expected job opportunities.

During a Senate hearing on Mar. 4, Raphael Warnock, a senator from the state of Georgia, said the ITC ruling "threatens the future" of SK Innovation's $2.6 billion electric vehicle battery plant project in Georgia.

Warnock pointed out that the plant would have created 2,600 clean energy jobs and said the ITC ruling is a "severe punch in the gut for folks who were counting on those jobs."

Warnock called for the Department of Transportation to analyze how the ITC ruling may affect the administration's green transportation goals, considering that the decision is subject to Biden's approval. The US president could veto the ruling after a 60-day review period for policy reasons.

Polly Trottenberg, the nominee for deputy secretary of transportation, said that the transportation department would commit to reviewing the ruling's impact.

Georgia Governor Brian Kemp also said the verdict would deliver a heavy blow to the SK battery plant construction in Georgia, putting at risk the vast investment made into the innovative manufacturing industry.

Last week, Biden signed an executive order to review the supply chain of electric vehicle batteries, semiconductors, medical supplies and rare earth minerals. His move has added weight to the possibility of a veto on grounds that the US needs to boost battery production as it falls far behind Europe and China.

But some say that Biden is unlikely to exercise his veto power given his strong stance on unfair trade practices. Also, there has yet to be a case in which a US president vetoed a trade secret infringement ruling.

"LG and SK have currently locked heads over the settlement and now there's a new variable -- the involvement of US political authorities," said a battery industry official. "Arriving at an agreement is expected to be a painful process," the official said.

Meanwhile, during a briefing on Thursday, South Korean Prime Minister Chung Sye-kyun also called for the two Korean EV battery makers to settle the dispute.

Chung said that the two companies' conflict does not serve the national interest and arriving at a swift agreement would be in the best interest of both parties.

Write to Man-su Choe at bepop@hankyung.com
Danbee Lee edited this article.