Hyundai Motor Co. HYMLF has revealed plans for a substantial $21 billion investment in the United States amid the Donald Trump administration's tariff threats.
What Happened: Trump at a White House event on Monday said that Hyunda's investment is a vindication of his administration's use of tariffs to create American jobs, reported Reuters.
Trump highlighted a $5.8 billion investment in American manufacturing, including a new steel plant in Louisiana.
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The announcement led to a significant surge in Hyundai’s shares, which rose by as much as 7.5% during early trading in Seoul, marking the largest intraday gain in over seven months. Kia Corp. and Hyundai’s battery partner, LG Energy Solution Ltd., also experienced gains of 4.3% and 2.3%, respectively.
Hyundai’s investment plan, which extends through 2028, aims to create approximately 14,000 direct jobs. It includes $9 billion to increase factory output to 1.2 million vehicles annually and $12 billion for other projects, including the Louisiana steel mill.
Hyundai Chairman Chung Euisun emphasized the investment’s role in strengthening the U.S. steel supply chain and deepening the partnership with the United States.
Why It Matters: The backdrop to Hyundai’s significant investment is President Trump’s aggressive tariff strategy, which has created uncertainty for automakers.
On March 11, Trump announced a 50% tariff on Canadian steel and aluminum, threatening the automotive industry with increased costs. He warned that failure to remove existing tariffs could lead to higher duties on Canadian cars, potentially crippling Canada’s automotive sector. Read more.
On March 12, Trump paused tariffs on the auto sector for Mexico and Canada, causing speculation about potential price hikes for vehicles. A poll showed that 75% of readers supported the delay, suggesting a possible increase in vehicle purchases before tariffs return.
Most recently, on March 24, Trump declared that auto tariffs were imminent, though some countries might receive exemptions. This announcement has heightened the urgency for automakers like Hyundai to secure their U.S. operations.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo courtesy: Hyundai
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