Hyundai Steel Reviews Construction of US Steel Plant... Responding to Export Quotas and Tariffs

Automotive high-strength hot-stamping parts produced at Hyundai Steel's Yesan plant. Photo by Hyundai Steel

With President Donald Trump's inauguration day just 12 days away, Hyundai Motor Group is reportedly considering building a steel mill in the United States. As South Korea's steel exports to the U.S. are restricted by quotas, and the Trump administration is pushing for the introduction of universal tariffs, Hyundai Motor Group, which is gearing up for full-scale electric vehicle production, appears to be preparing proactive measures to secure steel supply.

According to industry sources on the 8th, Hyundai Motor Group is reviewing the construction of a steel mill producing automotive steel sheets in the U.S., centered around its steel affiliate Hyundai Steel. It is also reported that Hyundai Motor Group has engaged in discussions with several state governments, including Georgia where its factories are located, regarding investment conditions such as infrastructure after going through specific business review stages. Some speculate that the investment scale could exceed 10 trillion won. A Hyundai Steel official stated, "We are reviewing investments in the southern U.S. region," adding, "The amount, timing, and production methods have not been decided."

Hyundai Motor Group has been considering new overseas construction investments but maintains that no concrete investment plans have been finalized yet. Earlier, in March last year at the shareholders' meeting, Seokang Hyun, President of Hyundai Steel, mentioned, "To respond to global protectionism, we are also considering local production bases," and added, "We will conduct detailed reviews on which regions to invest in to overcome trade barriers."

Currently, Hyundai Steel's annual crude steel production is about 20 million tons, of which approximately 5 million tons are automotive steel sheets. Of the automotive steel sheet production, about 4 million tons are supplied to affiliates Hyundai Motor and Kia. If large-scale electric vehicle plants operate in the U.S., export volumes will increase, but South Korea currently benefits from a "2.63 million ton tariff-free" quota on steel exports to the U.S. The situation is further complicated by the impending application of universal tariffs by the Trump administration.

Hyundai Motor Group operates plants in Alabama, Georgia, and the Hyundai Motor Group Meta Plant America (HMGMA). As Meta Plant production expands, the annual production capacity in the U.S. is expected to reach 1.2 million units.