Hyundai's 30 billion CAD move: U.S. tariff strategy unveiled

On Monday, Hyundai announced an unprecedented investment in the American economy. The company plans to invest approximately 30 billion CAD as part of a strategy to relocate production to the U.S. The central element of the project is the construction of a steel plant in Louisiana worth 8.2 billion CAD, which will provide employment to over 1,400 people. The plant will produce next-generation steel used in two of Hyundai's American automotive plants for the production of electric vehicles.

The investment announcement took place at the White House with the participation of President Donald Trump, Hyundai Chairman Euisun Chung, and Louisiana Governor Jeff Landry. During the event, Chairman Chung emphasized that this is the largest American investment in the company's history. The decision to open the plant in the Savannah region of Georgia "was initiated during my meeting with President Trump in Seoul in 2019," said Chung, adding that "the project coincides with the start of President Trump's second term, making this moment even more special."

President Donald Trump considers the investment, despite its beginnings in 2019, as evidence of the effectiveness of his current policy.

— This investment is a clear demonstration that tariffs very strongly work, — stated the American president.

Hyundai's decision comes at a time when international corporations are striving to avoid tariffs and potential trade war ahead of the deadline for imposing tariffs by the Trump administration, scheduled for April 2nd. Taiwan Semiconductor Manufacturing Co. and Japan's SoftBank are other foreign companies that have recently visited the White House to announce significant plans to relocate production to the U.S.

Hyundai Motor CEO, José Muñoz, recently stated in an interview with Axios that "the best way for us to navigate tariffs is to increase localization." The South Korean company is one of the leading sellers of electric vehicles in the United States, directly competing with Tesla. It already has two large car factories in the U.S., one in Alabama and another in Georgia. On Monday, Hyundai also announced the opening of a third car factory, also in Georgia.

During the investment announcement, President Trump stated that "this investment is a clear demonstration that tariffs very strongly work." Previously, Trump had already introduced a 25 percent tariff on the import of steel and aluminum, as well as import duties on cars from Asia and Europe, which are set to take effect next month. The goal is to increase car production in the United States.

South Korea is among the countries with which the U.S. has a trade deficit. In early March, Trump highlighted South Korea for imposing high tariffs on American exports, claiming that the Asian ally's tariffs are four times higher than those imposed by the United States. Seoul challenged this imbalance. According to the South Korean government, from 2024, the effective tariff rate on imports from the U.S. will be 0.79 percent, as the two countries have a free trade agreement.

Hyundai's announcement fits into a broader trend of increased foreign investment in the U.S. ahead of the April 2nd deadline, when even more stringent tariffs may be introduced against countries with large trade surpluses, such as South Korea. Trump's administration encourages investment in America's manufacturing industry, and similar announcements were recently made by Taiwan Semiconductor Manufacturing Company and Japan's SoftBank.

According to S&P Global Mobility data, 10.2 million cars were produced in American assembly plants last year, compared to 4 million in Mexican plants and 1.3 million in Canadian plants. Currently, about a million workers are employed in American factories producing cars, trucks, and automobile parts. Hyundai's new investment could significantly influence further development of this sector in the United States.