Euisun Jung, chairman of Hyundai Motor Group, promised an investment of 31 trillion won ($23.3 billion) in the U.S. in front of President Donald Trump. This is a conciliatory move ahead of the announcement of the U.S. auto tariffs. President Trump is set to announce mutual tariffs on the 2nd of next month, and some items, such as automobiles and semiconductors, will be presented separately, raising interest in whether Hyundai Motor can avoid tariffs.
On the 24th (local time), Chairman Jung met with President Trump at the White House and stated that he would invest $21 billion (about 31 trillion won) in the U.S. over the next four years from this year for automobiles, parts, logistics, steel, and future industries. This marks the largest investment amount announced by Hyundai Motor since it entered the U.S. market in 1986. During the previous administration of President Joe Biden, Hyundai Motor Group announced plans to invest a total of $10.5 billion in Hyundai Motor Group Metaplant America (HMGMA) and $5.5 billion in robotics, urban air mobility (UAM), and autonomous driving software.
As Chairman Jung announced the investment plan, President Trump responded, saying, "Hyundai is a great company." He noted, "Hyundai Motor Group will be producing steel and making its cars in America. As a result, they’ll not have to pay any tariffs." This implies some level of benefits for Hyundai Motor Group.
However, regarding this statement, a senior official from Hyundai Motor Group said, "President Trump took pride in leading large-scale investments and creating jobs in the U.S. through his tariff policy." They emphasized that the comment was merely a general mention that if production occurs in the U.S., there is no need to pay tariffs, and it does not mean that tariffs would be waived or suspended for cars manufactured in Korea and exported.
President Trump stated that he would announce tariffs on specific items, including automobiles, wood, and semiconductors, within a few days. The mutual tariffs scheduled to be imposed on the 2nd of next month are likely to be applied differently by country. President Trump has indicated that he would impose high tariffs on countries with significant trade surpluses with the U.S. that disadvantage U.S. exporting corporations. On the other hand, tariffs on specific items like automobiles are not applied differently by each corporation. Thus, even with a promised investment of 31 trillion won, Hyundai Motor Group cannot receive special treatment.
In the industrial sector, there are opinions that Hyundai Motor Group should pay close attention to the actions of the Trump administration. This is because there have been instances where President Trump has praised companies promising large-scale investments, only to suddenly change his stance. The chairman of the Taiwanese semiconductor manufacturer TSMC, Wei Zhejia, visited the White House on the 3rd, announcing an investment of up to $100 billion (about 147 trillion won) in the U.S. At that time, President Trump praised, "This investment is tremendous for both the U.S. and TSMC," but just four days later, on the 7th, he criticized, "Taiwan stole our semiconductor business."
President Trump reiterated his intent to abolish the semiconductor support law (CHIPS) established during the Biden administration. This law provides subsidies to corporations investing in the U.S. semiconductor industry.
The completed automobile industry sees Hyundai Motor Group gaining significant benefits from this large-scale investment in the mid to long term. By increasing the share of local production in the U.S. and strengthening the supply chain of finished vehicles and parts suppliers, they have laid a foundation to operate U.S. businesses smoothly during President Trump's four-year term, while also solving long-standing challenges.
As of 2023, the share of local production in Hyundai and Kia's U.S. sales was only 38%. The market share of its biggest competitor, Toyota, was 56%, while Honda and Nissan exceeded 60%. Last year, Hyundai and Kia sold a total of 1.7 million vehicles in the U.S., and through this investment, they plan to expand local production to more than 1.2 million vehicles, which is more than half.
An industry official noted, "Expanding local production in the U.S. was a task that had to be addressed even without pressure from President Trump," and added, "By making necessary investments and receiving praise from President Trump, substantial effects were also gained in terms of brand marketing in the U.S."