South Korean automotive giant Hyundai Motor Group has announced a $21 billion investment to expand its manufacturing presence in the United States, a move that may help shield both the company and South Korea from impending reciprocal tariffs imposed by the U.S. government, as reported by KED Global.

In an announcement made in Washington, D.C., Hyundai Motor stated that it will allocate $9 billion through 2028 to increase the U.S. production capacity of Hyundai Motor Co., Kia Corp., and its luxury brand Genesis to 1.2 million units annually. Additionally, the company plans to invest nearly $6 billion in constructing its first U.S. steel mill in Louisiana under its steel-making subsidiary, Hyundai Steel Co. This electric arc furnace mill will have an annual steel production capacity of 2.7 million tons and will support the expansion of local automotive component supply chains.

Furthermore, an additional $6 billion will be invested to strengthen Hyundai’s collaborations with American companies in key technology sectors, including autonomous driving, robotics, artificial intelligence, advanced air mobility, and future energy solutions. The unexpected investment announcement was made with Hyundai Motor Group Executive Chair Chung Euisun standing alongside U.S. President Donald Trump at a White House event. The move highlights Hyundai’s strategic efforts to mitigate the potential impact of the Trump administration’s proposed tariffs on foreign-made automobiles. This latest investment, scheduled from 2025 to 2028, will nearly double Hyundai's total U.S. investment since its entry into the American market in 1986. The company has already committed $20.5 billion in the country, including a $10.5 billion pledge made under the Biden administration in 2022.

Hyundai and Kia jointly sold over 1.7 million vehicles in the U.S. last year, with approximately 59.3% of them imported from South Korea. If the U.S. government implements a 25% tariff on imported vehicles, Hyundai’s competitive pricing advantage in the U.S. market could be significantly affected. Additionally, Hyundai Steel is at risk of higher costs due to a 25% tariff on all foreign steel and aluminum imports. By building its first U.S.-based steel mill, Hyundai aims to reduce tariff-related expenses for both its automotive and steel production divisions. Hyundai Steel, a subsidiary of Hyundai Motor Group, primarily supplies steel to Hyundai and Kia. Once its Louisiana mill becomes operational in early 2029, it will supply steel to Hyundai’s Alabama plant, which has a production capacity of 330,000 units annually, and Kia’s Georgia plant, which manufactures 350,000 units per year.

The new steel mill will also provide materials to Hyundai Motor Group’s dedicated electric vehicle manufacturing plant, Hyundai Motor Group Metaplant America LLC (HMGMA), in Georgia. This facility, capable of producing 300,000 EVs annually, has received a $7.6 billion investment from Hyundai and is set to officially open this Wednesday with a grand ceremony attended by Chairman Chung. With these three manufacturing facilities in place, Hyundai Motor Group will be able to produce approximately one million vehicles in the U.S. annually. Hyundai’s future production plans at HMGMA include electric vehicles such as the IONIQ 5 and IONIQ 9, as well as hybrid models, according to Hyundai Motor President and CEO José Muñoz.