Hyundai Declares A $20 Billion Commitment To The U.S

Hyundai, based in South Korea, and President Donald Trump revealed a $20 billion investment aimed at US on-shoring at the White House on Monday. This investment encompasses a $5 billion steel plant in Louisiana.

The facility in Louisiana, which has a cost of $5.8 billion, will be the first steel manufacturing site established by the car manufacturers in the US. It will produce upwards of 2.7 million metric tons of steel annually and generate over 1,400 jobs. Trump stated during a White House address that it would provide steel to automobile factories in Alabama and Georgia.

Yesterday afternoon’s announcement at the White House featured Trump, Hyundai Chairman Chung Eui-sun, and Louisiana Governor Jeff Landry.

According to Chung, this was the biggest investment in the US that the company had ever made.

“Thanks to President Trump’s economic policies, there are more investments, more jobs, and more money in the pockets of hardworking Americans,” White House Press Secretary Karoline Leavitt posted on social media.

“This investment is a clear demonstration that tariffs very strongly work,” Trump said Monday afternoon.

Chung said the decision to open the plant in the Savannah, Georgia area “was initiated during my meeting with President Trump in Seoul in 2019.” This project “coincides with the beginning of President Trump’s second term, making this moment even more special.”

In early January, trade publications reported that Hyundai was contemplating a steel plant in the US before Trump’s second term, aiming to reduce their own production costs and prepare for his protectionist economic policies.

Trump has already implemented 25% tariffs on steel and aluminum imports, along with levies on cars from Asia and Europe that are scheduled to take effect next month. The goal is to manufacture more cars in the United States; yet, it isn’t that straightforward.

As part of a deal to end a 2023 strike by the United Auto Workers, Stellantis, which manufactures cars in North America under the Jeep, Ram, Dodge, and Chrysler brands, agreed to reopen a closed plant in Illinois.

It highlighted the re-opening plans again in January, shortly after Trump assumed office, to guarantee him that they would boost American car production. However, that facility will not resume operations until 2027.

And even though Trump contends that his tariff threats are necessary to “save” the US auto industry, US factories already account for the majority of North American auto production.

S&P Global Mobility data indicates that last year, US assembly plants produced 10.2 million cars, while Mexican factories produced 4 million and Canadian factories produced 1.3 million. Approximately 1 million employees work at U.S. factories that manufacture automobiles, trucks, and automotive components.

Augmented investments

Hyundai’s announcement occurs before April 2, when even broader tariffs could be imposed on countries with significant trade surpluses, such as South Korea. With similar declarations from Japan’s SoftBank and Taiwan Semiconductor Manufacturing Company, Trump is promoting investments in American manufacturing.

Last month, Apple announced plans to invest $500 billion over the next four years to expand facilities, manufacturing, and projects throughout the United States. The announcement seemed directed at assisting the company in evading new tariffs on goods imported from China, even though some investment initiatives were probably already in progress.

In January, Oracle, OpenAI, and SoftBank also revealed their plans to collaborate in forming a new company named Stargate, aimed at developing artificial intelligence infrastructure in the United States. The companies intend to invest $500 billion into the project over the next few years.

It has been common for incoming presidents and those elected to the presidency to make joint announcements alongside corporations regarding large-scale investments in the US aimed at bolstering American manufacturing. However, their success history is inconsistent.

In 2017, Trump and Foxconn declared plans for a $10 billion electronics factory in Wisconsin, which was anticipated to generate 13,000 jobs. However, the company ultimately gave up on the majority of its plans for the facility and the advanced products it was meant to manufacture. In 2021, the company announced its plan to invest only $672 million in a revised agreement that would generate fewer than 1,500 jobs.