Acceleration of Korean Companies' Investments in the U.S.
Chung Euisun and Trump Make Joint Announcement
"$31 Trillion to Be Invested in the U.S. Over the Next Four Years"
Trump: "No Need for Tariffs"
Other Companies Also Announce Investment Plans
Hyundai Motor Group has made a surprise announcement of a new investment worth 31 trillion won in the United States, accelerating major domestic companies' investments in the U.S. On the 24th (local time), Chung Eui-sun, Chairman of Hyundai Motor Group, met with U.S. President Donald Trump at the White House and mentioned increasing the production capacity of the electric vehicle plant in Georgia by 200,000 units annually and constructing an integrated steel mill in Louisiana, stating, "We will invest $21 billion (approximately 31 trillion won) in the U.S. over the next four years." President Trump responded, "Hyundai is a very excellent company that does not have to pay tariffs."
This announcement is the first investment declaration made directly at the White House by a CEO of a domestic company since the launch of the second Trump administration. In particular, the message to strengthen the production base in the U.S. from steel to automobiles is interpreted as a preemptive response to the recent trade pressures announced by President Trump, including a 25% tariff on imported cars, re-imposition of tariffs on steel and aluminum, and reciprocal tariffs.
There is analysis that other major groups such as Samsung Electronics, SK, LG, POSCO, and Hanwha are also likely to expand their investments in the U.S. Jang Sang-sik, Director of the International Trade and Commerce Research Institute at the Korea International Trade Association, evaluated, "Hyundai Motor will be a representative case of building the entire value chain within the U.S.," adding, "It could serve as a catalyst for other domestic companies to accelerate their decisions on investing in the U.S."
Samsung Electronics, which is building a semiconductor plant worth $17 billion in Taylor, Texas, is weighing additional investments two to three times the size of its existing investments, including a second plant locally. SK Group is reviewing expansion of investments in various fields in the U.S., such as batteries (SK On) and semiconductor post-processing (SK Hynix), while SK Innovation is discussing Alaska liquefied natural gas (LNG) development as a Korea-U.S. public-private energy cooperation project. LG is constructing an independent battery plant in Arizona and plans to establish a next-generation battery research and development (R&D) hub in the future.
As Hyundai Steel announced an investment of $5.8 billion to build an integrated steel mill with an annual capacity of 2.7 million tons in the U.S., POSCO is also expected to accelerate its review of local production of eco-friendly steel products in the U.S. Hanwha is expected to promote local production and export expansion of domestically produced weapon systems such as satellites, launch vehicles, and self-propelled artillery, focusing on aerospace.
An industry insider said, "Hyundai Motor has fired the starting shot for investment," adding, "Other companies are likely to sequentially announce their investment plans as soon as coordination with the U.S. government is completed."
Experts believe that Hyundai Motor's announcement will influence the overall trend of expanding domestic companies' investments in the U.S. Shin Won-kyu, invited research fellow at the Korea Economic Association, explained, "Considering Hyundai Motor's sales and business expansion potential in the U.S. market, conditions are sufficient to expect the effects of proactive investment," adding, "Companies with capacity will pursue new investments, while those without will consider ways to leave a positive impression on the U.S. government through existing facility expansions."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
