South Korea's top diplomat in the U.S. said talks are under way with Washington to mitigate concerns over the U.S. Inflation Reduction Act(IRA) adversely impacting foreign electric vehicle(EV) makers, including South Korean firms.

At a parliamentary audit session in Washington on Wednesday, Ambassador Cho Tae-yong said Seoul is seeking a resolution, arguing that the IRA could possibly be in violation of the South Korea-U.S. free trade agreement(FTA).

The ambassador said a bill submitted to the U.S. Senate seeking to impose a grace period for EVs made outside of North America through 2026, thereby allowing them to qualify for U.S. tax incentives, could be one way to resolve the issue.

According to the new law, EVs must be assembled in North America or meet a percentage requirement for battery component sourcing in order to qualify for a tax credit of up to 75-hundred dollars.

Citing examples of South Korean chipmakers, Samsung Electronics and SK hynix, securing a temporary exemption from new U.S. export curbs for one year, Cho pledged to continue to pursue national interest in the areas of bio and economic security.