Posted on 26 Mar 2025
South Korean business conglomerate Hyundai Motor Group is to invest $21 billion in the United States that will include $6.1 billion for a steel works to provide automotive sheet and other steel items mainly for Hyundai Motor automotive plants in the US, the Seoul-headquartered company has announced.
In January, news broke that Hyundai Steel, South Korea's second-largest steelmaker after POSCO, was considering building a green-field steel mill in the US as insurance against the incoming Trump administration reintroducing import tariffs on automotive sheets for the US car plants operated by its parent, Hyundai Motor, as Mysteel Global reported. At the time, the steelmaker had confirmed its plans but insisted no decision had been made.
In the White House on Monday, the Hyundai Group's Executive Chair, Eui-sun Chung, flanked by Donald Trump and Louisiana Governor Jeff Landry, announced that besides the $6.1 billion for the steel works, another $8.6 billion will be invested for the automotive sector, for component parts and logistics, and $6.3 billion for "future industry sectors and energy... to strengthen the U.S. supply chain (for) steel and parts for automobiles."
Hyundai Steel had been in discussions with several southern US states including Texas, Georgia and Louisiana to build a plant to supply the auto assembly plants that Hyundai Motor and its sister company Kia Corp operate there, as reported in January. The steelmaker had been aiming to confirm a site and begin construction by mid-2026, targeting a 2029 commissioning, but clearly the severity of Trump's import-tariff blitz prompted the Koreans to hasten their decision.
Trump stressed that Hyundai's investment was a "clear" demonstration that his tariff policy "very strongly" works. "The tariffs are bringing them in at levels that have not been witnessed. Hyundai will be producing steel in America and making its cars in America," Korea's Yonhap News quoted Trump as saying Monday.
The Korean conglomerate's envisioned steel plant in Louisiana will have a capacity of 2.7 million tonnes/year and is to be an electric furnace-based works but other details are yet to be announced.
With its new $8.6 billion investment in automotives, Hyundai aims to establish facilities for building 1.2 million cars annually in the U.S. by bolstering the yearly manufacturing capacity of Hyundai Motor's Metaplant America electric vehicle plant in Savannah, Georgia – scheduled to be formally opened on March 26 local time – to 500,000 vehicles from 300,000 vehicles initially planned, Yonhap also reported.
Hyundai Motor and Kia Corp sold some 1.7 million cars in the U.S. last year and given that their combined US production capacity is only 1 million units, the other 700,000 would have been imported – with imports from now on subject to Trump's soon-to-be-announced import tariff on vehicles.
In Korea, Hyundai Steel currently produces around 20 million tonnes/year of finished steel including about 5 million t/y of automotive sheet, some 80% of which is supplied to Hyundai Motor and Kia Corp. However, while the car makers have plants in several countries, Hyundai Steel itself has no upstream production bases overseas and so must export from its domestic works – its huge Dangjin plant south of Seoul, and from its Suncheon works on the southern Korean coast.
Hyundai's announcement marks the first large-scale investment by a South Korean company in the U.S. following the start of Trump's second term, and at the very least, Chung's announcement on Monday before a beaming US president brought some sorely needed positive media exposure for the Hyundai Group's beleaguered steel producer.
Less than two weeks ago on March 14, Hyundai Steel entered what it described as an 'emergency management system' in response to deteriorating business circumstances caused by rising costs and an on-going labour dispute, all exacerbated by Trump's 25% import tariff slapped on steel and aluminum. The salaries of all executives were cut by 20% and offers of voluntary redundancy were planned for all employees, as Mysteel Global reported.
Source:Mysteel Global
