Hyundai invests $ 20 billion in the USA

Hyundai invests $ 20 billion in the USA

Hyundai, the company based in South Korea, announced an investment of $ 20 billion in the US industry together with President Donald Trump on Monday. As part of this initiative, a new steelworks in Louisiana will be built for $ 5 billion, as was announced during the press briefing in the White House.

New steel mill in Louisiana

The steel mill in Louisiana will be the first steel production facility of Hyundai in the USA with an investment amount of $ 5.8 billion. It will produce over 2.7 million tons of steel every year and create more than 1,400 jobs. According to Trump, the Stahlwerk will supply American automotive production facilities in Alabama and Georgia with steel.

Hyundai's largest investment in the USA

A step into the future of the US industry

This investment clearly shows how effective tariffs can be, Trump noted. Chung mentioned that the decision to build the work in the area of ​​Savannah, Georgia, was made during a meeting with Trump in Seoul in 2019. This makes this moment special because the project coincides with the start of Trump's second term.

trading and protective tariffs

already reported in January that Hyundai is considering the construction of a steel mill in the United States in order to reduce its own production costs and prepare for Trump's protectionist economic policies. Trump had already imposed 25 % tariffs on steel and aluminum imports as well as cars from Asia and Europe that are supposed to come into force next month. The goal is to produce more cars in the United States, but this is not so easy.

American automotive production

Despite Trump's argument that his customs threats are necessary to “save” the US car industry, the US industry already produces most of North American car production. According to data from S&P Global Mobility, 10.2 million cars in US assembly plants were built last year, compared to 4 million in Mexican factories and 1.3 million in Canada. Around 1 million workers are employed in automotive production in the United States.

effects and future investments

The Hyundai announcement is made before April 2, on which possibly even more comprehensive tariffs against countries with a high commercial balance sheet surplus, such as South Korea, are introduced. Trump promotes investments in American production, which is also supported by technology companies such as the Taiwan Semiconductor Manufacturing Company and Japans Softbank. Apple announced in the last month of investing $ 500 billion in the expansion of its facilities, manufacturing and projects in the USA over the next four years to prevent new tariffs on goods from China.

Oracle, Openai and Softbank also announced in January to jointly found a new company called Stargate, which is intended to expand the infrastructure for artificial intelligence in the USA. These companies are planning to invest $ 500 billion in the project in the coming years.

successful partnerships on the test bench

It is not unusual for president and designated president to make joint announcements with companies through massive investments in the United States to promote American production. However, the success balance of such initiatives is mixed. Trump and Foxconn announced a $ 10 billion in electronics factory in Wisconsin in 2017, which was to create 13,000 jobs. However, the plans for the factory were largely rejected, and the company finally invested only $ 672 million in a revised contract that should create less than 1,500 jobs.

This article was also supported by Chris Isidore and Claire Duffy from CNN.