Hyundai Motor Group (HYMTF+2.58%), the South Korean conglomerate that also owns the Kia and Genesis brands, announced a $21 billion new investment in the U.S. in a bid to dodge new tariffs and strengthen its supply chain.
Hyundai, through its Hyundai Steel subsidiary, will invest $5.8 billion in a Louisiana steel plant, President Donald Trump said at a press conference alongside Hyundai executives and Gov. Jeff Landry. The plant will employ some 1,300 people and make more than 2.7 million metric tons of steel each year, which will be used to build Hyundai’s vehicles.
The plant will serve “as the foundation for a more self-reliant and secure automotive supply chain in the U.S.” Hyundai Executive Chairman Euisun Chung said at the press conference.
Hyundai currently makes a handful of models at its factory in Montgomery, Alabama, and recently began producing electric SUVs at a manufacturing plant west of Savannah, Georgia. Kia makes some electric and gas-powered vehicles at a plant in West Point, Georgia.
The plans come as major companies, including automakers, look to avoid Trump’s threats to spike tariffs.
Japanese investment giant Softbank and Taiwan’s TSMC (TSM+2.91%) have made major announcements at the White House. Apple (AAPL+0.75%), which makes its iPhones and other products overseas and received a tariff exemption during Trump’s first term, announced a $500 billion investment plan. Honda Motor Co. (HMC-0.02%) has reportedly ditched a plan to move some work to Mexico from Indiana.
The president has already introduced 25% tariffs on all foreign steel and aluminum imports and plans to introduce broad “reciprocal” tariffs next month. Although the White House’s plans have reportedly been narrowed down, Trump has repeatedly called for sector-specific tariffs on products like vehicles and pharmaceuticals.
“This investment is a clear demonstration that tariffs very strongly work, and I hope other things also, but the tariffs are bringing them in at levels that have not been witnessed,” Trump said Monday at the press conference. “You know, there are no tariffs if you make your product in America.”
Hyundai officials have been in touch with Trump’s aides since he won the election in November, according to The Wall Street Journal. The automaker also donated $1 million to his inaugural fund, a first for the company.
Hyundai Motor Group will also purchase $3 billion worth of U.S. liquified natural gas to “support America’s energy industry and enhance our energy security,” Chung said. Trump has made aiding the U.S. energy industry a priority of his administration.
Trump hit imports from Mexico and Canada with a 25% tariff, although he granted a one-month reprieve for products compliant with the USMCA trade deal. About 8% of the vehicles Hyundai sells in the U.S. are sourced from Mexico, according to S&P Global Mobility (SPGI+1.34%) data. It’s unclear whether those vehicles are protected from the tariffs.
Hyundai Motor Co. CEO José Muñoz, while speaking at the company’s annual shareholder meeting, emphasized the company’s work to build vehicles in the U.S. for that market. Hyundai’s Georgia plant will ramp up work on the all-electric Ioniq 5 and Ioniq 9, as well as hybrid vehicles, according to The Korea Times.
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