South Korea’s Hyundai has announced a major $21 billion investment in its US operations, just days before new tariffs set to take effect on April 2, 2025. The move is seen as part of the company’s strategic push to strengthen its presence in the United States and bolster production capabilities ahead of the upcoming trade changes.
The announcement includes the construction of a $5.8 billion steel facility in Louisiana, which is aimed at supporting Hyundai’s expanding US production. The new plant will contribute significantly to the company’s ability to increase vehicle production and invest in cutting-edge technologies, such as artificial intelligence (AI) and autonomous driving.
During a White House event, President Donald Trump praised Hyundai’s decision, stating that it demonstrated how tariffs can drive meaningful economic impact. Trump also hinted that more tariffs on imported vehicles could be introduced soon, likely within the coming week.
New Steel Plant and Tech Investments Strengthen Hyundai’s US Footprint
Hyundai’s new steel factory in Louisiana will produce over 2.7 million metric tons of steel annually. The facility will play a crucial role in supplying materials to Hyundai’s existing production lines in Alabama and Georgia, further supporting the company’s robust expansion in the region. The plant is expected to create more than 1,400 jobs and add to Hyundai’s growing network of manufacturing sites across the United States.
In addition to the steel plant, Hyundai has committed to a $9 billion investment aimed at increasing its annual US vehicle output to 1.2 million cars by 2028. The company will also invest $6 billion in partnerships with American tech firms to advance AI, robotics, and self-driving vehicle technologies. Hyundai plans to open a new $7.59 billion vehicle and battery plant in Georgia later this week, continuing its momentum in the region.
The company already operates a plant in Alabama, while its affiliate Kia runs a facility in Georgia. When all three plants reach full capacity, Hyundai and Kia together will produce one million vehicles annually in the United States.
Energy Deal and Trade Considerations Shape Hyundai’s Strategy
In addition to its manufacturing and technology investments, Hyundai has also confirmed plans to purchase $3 billion worth of liquefied natural gas (LNG) directly from American suppliers. This move underscores Hyundai’s commitment to investing in US-based energy resources and enhancing its ties with American industries.
Hyundai’s expansion comes at a time of heightened trade tensions, with several global companies targeting the US market in response to tariffs introduced by President Trump. Since his return to office, many companies have announced large investments in US operations, though some of these were planned under the previous administration. Under President Biden, Hyundai had already committed $10 billion towards technology development by 2025, but this latest $21 billion announcement comes just before the expected start of new US tariffs.
The tariffs, which may impact trade with South Korea, come at a time when the country holds a significant trade surplus with the United States. Last month, Trump imposed a 25% import duty on steel and aluminum entering the US, and expanded those tariffs to include a wide range of metal products, from bolts to beverage cans. American automakers, including Ford and General Motors, have urged Trump to exempt vehicles and parts from these new tariffs, citing concerns over the impact on the industry.
As Hyundai and other global firms navigate the complexities of trade policy, their investments in US operations signal a long-term strategy to expand and innovate, even in the face of shifting trade dynamics. With the new tariffs set to begin on April 2, the automotive industry is closely monitoring the developments, which could have a significant impact on manufacturing and trade relations between the US and countries like South Korea.
