South Korean conglomerate Hyundai Motor Group said it will invest $21 billion in the United States over the next four years, including a new $5.8 billion steel plant in the southern state of Louisiana.
Hyundai Chairman Chung Eui-sun announced the investment on March 24 at the White House alongside President Donald Trump and Louisiana Governor Jeff Landry. Hyundai plans to allocate $8.6 billion to automobile factories, $6.1 billion to steel mills, parts, and logistics, and $6.3 billion to future business sectors and energy.
Hyundai’s announcement comes just days before Trump imposes new reciprocal tariffs on trading partners. The move has raised expectations that other Korean conglomerates like Samsung, SK, LG, POSCO, and Hanwha will follow suit.
Just days earlier, on March 21, Hanjin Group Chairman Cho Won-tae signed an agreement to purchase $32.7 billion worth of aircraft and services from Boeing and GE Aerospace.
“Hyundai and Korean Air are making these investments for business, but they’re also offering so-called ‘gifts’ that Trump wants,” said a senior industry executive. ”Other companies are reviewing similar U.S. investment plans to foster a favorable business environment in the early days of the new administration.”
Hyundai Motor Group has been shifting production abroad, a move that picked up speed after the 1997 Asian financial crisis. Hyundai Motor has not built a new domestic production facility in Korea in nearly three decades after completing its Asan plant in 1996 and Kia’s Hwaseong plant in 1997. The group’s domestic production capacity also declined over time. In the early 2010s, Hyundai and Kia had a combined annual production capacity of 3.5 million vehicles, but that figure has dropped to 3.15 million units this year, constrained in part by the country’s 52-hour workweek cap.
The semiconductor sector, considered the cornerstone of the Korean economy, is also increasingly pivoting overseas. Samsung Electronics is investing over $37 billion to build two foundries and an R&D center in Taylor, Texas. SK Group is spending $22 billion in Indiana and Georgia to build a packaging facility for high-bandwidth memory (HBM) and an EV battery plant.
LG has pledged $20 billion to construct a home appliance plant in Tennessee and a battery plant in Georgia. Hanwha has allocated $2.2 billion to build a solar module factory and acquire a shipyard in Philadelphia.
Combined with Hyundai’s investment, Korean conglomerates have pledged more than $102.2 billion in U.S. investment.
These large-scale investments are not limited to conglomerates moving operations to the U.S. When Hyundai set up its EV plant in Georgia, affiliates like Hyundai Mobis and smaller suppliers producing brakes, consoles, and doors also moved in, effectively relocating the entire EV production value chain to the U.S.
While Trump’s protectionist trade policy influenced Hyundai’s investment, many Korean companies also point to Korea’s increasingly anti-business culture, regulations, and strong labor unions as key reasons for expanding abroad.
For instance, the semiconductor sector has repeatedly requested exemptions from the 52-hour workweek cap for R&D purposes, but the proposal remains stalled at the National Assembly. The Serious Accidents Punishment Act is another barrier that drives Korean companies overseas and deters foreign firms from entering Korea. Calls to amend steep inheritance taxes, cited as a hurdle for many businesses, have also largely been ignored.
