U.S. governor calls on Biden to overturn trade ruling against SK Innovation

FILE PHOTO: Republicans gather for the GA GOP election night event in Atlanta
FILE PHOTO: Georgia Governor Brian Kemp speaks at the GA GOP election night event for the run-off election for Georgia’s two Senate seats, featuring incumbent Republican U.S. Senators David Perdue and Kelly Loeffler and Democratic challengers Jon Ossoff and Raphael Warnock, in Atlanta, Georgia, U.S., January 5, 2021. REUTERS/Brian Snyder

February 15, 2021

By Ben Klayman and David Shepardson

DETROIT/WASHINGTON (Reuters) – The governor of Georgia on Friday called on President Joe Biden to overturn a trade ruling made against SK Innovation, saying the decision would hurt the electric vehicle battery maker’s plant being built in the southern state.

Governor Brian Kemp’s request came two days after the U.S. International Trade Commission sided with LG Chem Ltd, which accused SK Innovation of misappropriating trade secrets related to EV battery technology.

Biden has 60 days to overturn the ruling, which included a 10-year exclusion order prohibiting imports into the United States of some batteries. The move could effectively ban the company from supplying EV batteries in the United States unless the company can source all the needed materials there – a step analysts say is not feasible.

“Unfortunately, the International Trade Commission’s recent ruling puts SK’s significant investment in 2,600 clean energy jobs and innovative manufacturing in peril during a pandemic,” Kemp said in a statement.

Kemp warned that the long-term prospects for SK Innovation’s $2.6 billion battery plant in Jackson County, Georgia, would be “harmed significantly.” The plant will eventually build batteries for Volkswagen AG and Ford Motor Co.

White House officials could not be reached to comment. SK officials declined to comment, but LG Chem called Georgia a victim of SK’s actions.

SK Innovation “can remedy this event by adequately compensating (LG Energy Solution) for their unlawful conduct,” Song Jung, counsel for LG Chem unit LG Energy Solution (LGES), said in a statement. “LGES wants to work with Governor Kemp to help the plant and the workers, while upholding the rule of law.”

On Thursday, Ford Chief Executive Jim Farley publicly encouraged LG Chem and SK Innovation to reach a settlement. VW and Ford previously warned a U.S. legal dispute between South Korean battery makers could disrupt supplies of the key EV parts and cost U.S. jobs during the COVID-19 pandemic.

The ITC sided with LG Chem, but permitted SK to import components for domestic production of lithium ion batteries for Ford’s EV F-150 program for four years, and for Volkswagen of America’s EVs for two years.

SK Innovation said after the ruling that it regretted the decision but cited the 60-day presidential review period. Biden has made EVs and reducing vehicle emissions a top priority.

(This story has been refiled to correct typo in company name to LG Chem, not LE Chem, in paragraph seven)

(Reporting by Ben Klayman in Detroit and David Shepardson in Washintgon; Editing by Leslie Adler and Matthew Lewis)