Democratic Party of Korea leader Lee Jae-myung promised on the 20th to provide tax support for Korean manufacturing corporations. Given the rapidly changing international trade environment since U.S. President Donald Trump's inauguration, the goal is to assist corporations in increasing domestic production and jobs.
Lee visited the Hyundai Motor factory in Asan, South Chungcheong Province, on the 20th and held a "field meeting to seek measures to respond to changes in the international trade environment."
The meeting was attended by Lee, along with Kim Won-hee, the opposition secretary of the Ministry of Trade, Industry, and Energy's Small and Medium Venture Business Committee, and Kang Hoon-sik, a lawmaker from Asan, South Chungcheong Province. From Hyundai Motor, Lee Dong-seock, president in charge of domestic production, Vice President Lee Hang-soo from the strategic planning department, and Executive Director Park Se-guk, head of the Asan plant, welcomed Lee.
Lee entered the factory around 10 a.m., greeting employees. He wrote the phrase, "I support Hyundai Motor's global dominance in a world where everyone lives together," in the guestbook. He later took commemorative photos in front of the large electric sports utility vehicle (SUV) "Ioniq 9" that was released on the 13th.
The meeting was convened to explore response measures regarding the recent U.S. Trump administration's move to impose tariffs on imported cars. President Trump is expected to impose a 25% tariff on imported cars as early as next month. The Asan plant is known as a strategic hub for Hyundai's exports, having exported 2.2 million out of 3.2 million finished cars produced last year.
Lee emphasized the need for Korea to protect its domestic industries and create jobs, similar to the United States. He noted, "Currently, the U.S. is driving its protection of domestic industries and job creation to what could be considered excess" and added, "We should learn what we can from U.S. policy." He further stated, "We should consider what can be done politically to protect the domestic automobile industry."
He particularly suggested a "domestic production promotion tax credit" as a response to the rapidly changing international trade environment. Lee stated, "I understand that Japan and the U.S. have already implemented this. There is a need to newly introduce deduction systems and tax credit systems to encourage domestic production and protect domestic industries," and added, "It might be appropriate to call it a domestic production promotion tax credit."
He remarked, "We need to create a world where everyone lives together, as the growth of corporations is the essential part of that country's economic growth," adding, "I hope Hyundai Motor stands at the center of Korea becoming an economic powerhouse recognized by the world, where opportunities are provided for all."
The Democratic Party stated that the domestic production promotion tax credit referenced by Lee is not limited to the automotive industry. After the meeting, Democratic Party lawmaker Lee Geon-tae told reporters, "It was a general observation made in a situation where the domestic economy is declining," and added, "Hyundai requested overall support for the electric vehicle sector."
According to the Korea Trade-Investment Promotion Agency (KOTRA), the United States established a tax credit system for advanced manufacturing production under the Inflation Reduction Act (IRA) last year. The system allows tax credits proportional to domestic production and is limited to eligible items such as solar, wind parts, inverters, and battery parts produced in the U.S. mainland or U.S. territories.
This is effective until 2029, gradually reducing thereafter, and will cease to be effective after 2032.
Japan has established a so-called "strategic sector domestic production promotion tax credit" to reduce corporate tax based on production and sales volumes related to the IRA. The support targets five sectors, including electric vehicles (EV), batteries, sustainable aviation fuel (SAF), and green steel and green chemicals produced from plants or waste.