POSCO Group and Hyundai Motor Group have formed a strategic partnership that marks a rare collaboration between South Korea’s two largest steelmakers. POSCO will invest in a new U.S. steel plant for Hyundai Steel, the automotive group’s steelmaking affiliate, as both companies navigate rising global trade tensions, particularly the threat of a 25% U.S. tariff on steel imports under the Trump administration.

Though neither company directly cited the U.S. tariffs as the reason behind the investment, they emphasized the rapidly evolving global trade landscape as a driving force. The agreement, formalized through a memorandum of understanding signed Monday, covers collaboration in both the steel and rechargeable battery sectors.

As part of the agreement, the two groups will jointly invest in building an integrated steel mill in Louisiana. The plant will use electric arc furnace technology and is scheduled to be completed and operational by 2029. Once online, it is expected to produce 2.7 million tons of steel plates annually for global automakers. While the project is estimated at $5.8 billion, details about POSCO’s specific investment have not been disclosed.

Hyundai Motor Group Executive Chair Chung Euisun first revealed the Louisiana project last month during a meeting with former President Donald Trump at the White House. It is part of Hyundai’s broader $21 billion U.S. investment plan over the next four years. Hyundai Steel previously announced its intention to secure external investors for nearly half the project's cost.

POSCO is reportedly considering marketing some of the plant’s output under its own brand, complementing its existing production for automakers in Mexico. The investment also offers POSCO a pathway to mitigate longstanding trade barriers in the North American market.

"Through our synergy, we can pursue sustainable growth in both steel and battery sectors amid global trade shifts," said POSCO Holdings President Lee Ju-tae.

The partnership also extends to battery materials. POSCO Group, which has invested in lithium production and produces cathode and anode materials through its subsidiary POSCO Future M, aims to bolster Hyundai's electrification plans. Hyundai Motor Group targets annual production of 3.2 million electric vehicles by 2030.

The collaboration is expected to help Hyundai secure a steady supply of battery components as the U.S. and European Union tighten trade regulations.

“By joining forces with POSCO, we aim to strengthen our global competitiveness while laying the foundation for sustainable growth and leadership in future mobility,” a Hyundai Motor Group spokesperson said, according to the several media reports.