Deadline for President Biden's Veto Approaching
LG Energy Solution (LGES) and SK Innovation (SKI) are failing to bury the hatchet. The United States International Trade Commission (USITC) ruled in favor of LGES in their trade secret lawsuit on Feb. 10 and SKI may have to stop its battery business in the United States. The USITC banned SKI’s EV battery component import and sale for 10 years while giving them 60 days to meet halfway.
The deadline is April 10. SKI can survive if the two South Korean companies reach an agreement before that day or U.S. President Joe Biden vetoes the ITC ruling. In fact, they met with each other early this month. However, the meeting led to nothing with LGES demanding huge money for compensation.
According to a press release issued by SKI on March 16, LGES sent a letter to a senator in Georgia stating that SKI does not respond to its dialogue proposal. SKI denounced LGES for lying simply to deter the U.S. president's veto against the ITC decision. In addition, LGES announced that it will invest more than SKI in the U.S., suggesting that there will be no problem in battery supply without the SKI plant under construction in Georgia. Yet the US industry gave a skeptical response to the proposal instead of welcoming it.
Concerns are mounting among those in the industry. Ford VP Jonathan Jennings, who is in charge of global commodity purchasing at the company, recently urged the South Korean government to go between them. Ford is currently doing business with both LG Energy Solution and SK innovation. Volkswagen, another company doing business with both, also made the same request. South Korean Prime Minister Chung Se-kyun called for the same in as early as January. According to insiders, LG Energy Solution rejected such calls over and over without any specific reason.
The two companies' agreement will prevent disadvantages to the government and industry of the United States. However, even if they fail to reach an agreement out of court, LGES can still get an adequate remedy for its damage in federal court. The U.S. government would do well to take this into consideration and reach a conclusion that can promote job creation, monopoly prevention, its own green policies and its hegemonic supremacy over China in key technologies.