That investment includes plans to build a new steel plant in Louisiana, and comes amid threats from the United States to impose tariffs on countries such as South Korea.
Even though the U.S. remains on recession watch following the Fed’s interest rate hike, here are the key developments (and a few bumps to look out for) that drove us pumps today: Big money and a Louisiana steel mill
Hyundai’s $21 billion investment includes the $5.8 billion steel plant in Louisiana. The plant will produce more than 2.7 million metric tons of steel annually and create over 1,400 jobs. The steel will supply Hyundai’s car plants in Alabama and Georgia.
Expanding Production and Alliances in the U.S.
The Hyundai lag, at minimum, will also allocate $9 billion until 2028 to increase US vehicle manufacturing capacity to 1.2 million units. The first $6 billion will be used to bolster US partnerships in areas such as autonomous driving, robotics, AI and advanced air mobility.
Tariff Impact on Korean Steel
United States President Trump’s threats of retaliatory tariffs against other countries, including South Korea, is causing people in the Korean steel industry to hesitate. Long-standing tariffs on steel and aluminium make the picture more complex.
Investment Seen as Reaction to Tariff
Hyundai’s overall investment, Trump has argued, attests to the success of his tariff policies. He said he thinks more auto tariffs are on the way. Hyundai’s announcement is the latest in a string of recent announcements from companies of investments in the U.S. after Trump was sworn back in to the White House and some investments include projects already on the drawing board.
Hyundai’s enormous investment in the United States arrives at a pivotal moment here in world-trade history. President Trump’s predatory tariff policies, along with his administration’s emphasis on domestic manufacturing, have been hard on foreign automakers. The fact that Hyundai doubled down on US production and infrastructure as well seems to show the automaker is doing all it can to protect itself against further protectionism.
One of the most high-profile — and by far the most expensive — parts of Hyundai’s investment is a new steel plant in Louisiana. Beyond providing jobs, the facility will also tap a crucial supply chain pillar for the company’s efforts to produce automotive products domestically in the U.S. Hyundai has plans to reduce its reliance on imported steel and potentially insulate itself from tariff pressures in the future by sourcing the metal domestically.
Hyundai is investing billions into America, and its U.S. production capacity is slated for a total of 1.2 million vehicles by 2028. It will help the Korean automaker to meet surging orders for its cars in the US and easily grow it market share. While reiterating its ambitions to continue to compete in changing automotive industry with more in-depth partnerships on adjacent businesses across a wide range of next-generation technologies like autonomous driving, AI and many others.
One of the biggest cliffs to tiptoe around, of course, are the ripple effects of Trump’s tariffs on the Korean steelmaking industry and Hyundai’s supply chain as a whole. They would also be subject to additional tariffs on imported components and materials that could go into the Hyundai calculator and profitability. Investing in a US steel plant could play as progressive for the company in having to mitigate that risk of tariffs, but how the administration’s trade policies play out long-term is still to be determined.
Trump’s return to the White House as Hyundai invests, and his renewed focus on trade suggests some meeting of economic and political interests here. While the company’s expansion intentions may have long been in the works, the tight political climate crystallized the announcement and decided the scale of the investment. Investments in the U.S. are becoming free trade and political matters, embedding foreign automakers more and more into the U.S. government.
