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New York (CNN) โ South Korea-based Hyundai and President Donald Trump announced a $20 billion investment in US on-shoring on Monday, which includes a $5 billion steel plant in Louisiana, at the White House Monday.
The $5.8 billion Louisiana facility will be the car manufacturersโ first steel manufacturing facility in the US and will produce more than 2.7 million metric tons of steel a year and create more than 1,400 jobs. It will supply steel to auto plants in Alabama and Georgia, Trump said in remarks at the White House.
The announcement this afternoon at the White House included Trump, Hyundai Chairman Euisun Chung and Louisiana Governor Jeff Landry.
Chung said it was the companyโs largest US investment ever.
โMore investments, more jobs, and more money in the pockets of hardworking Americans โ all thanks to President Trumpโs economic policies,โ White House Press Secretary Karoline Leavitt wrote on social media.
CNBC first reported the announcement. Hyundai didnโt immediately respond to CNNโs request for comment.
โThis investment is a clear demonstration that tariffs very strongly work,โ Trump said Monday afternoon.
Chung said the decision to open the plant in the Savannah, Georgia area โwas initiated during my meeting with President Trump in Seoul in 2019.โ This project โcoincides with the beginning of President Trumpโs second term, making this moment even more special.โ
Trade publications reported in early January that Hyundai was considering a steel plant in the US ahead of Trumpโs second term, seeking to lower their own production costs and bracing for his protectionist economic policies.
Trump has already enacted 25% tariffs on steel and aluminum imports, as well as levies on cars from Asia and Europe set to go into effect next month. The aim is to build more cars in the United States; however, itโs not that simple.
For example, Stellantis, which makes cars in North America under the Jeep, Ram, Dodge and Chrysler brands, agreed to re-open a shuttered plant in Illinois as part of a deal to end a 2023 strike by the United Auto Workers.
It pointed to those re-opening plans once again in January, soon after Trump took office, to assure him it would increase American car production. But that plant wonโt reopen until 2027.
And despite Trumpโs argument that his tariff threats are needed to โsaveโ the US ๏ปฟauto industry, US factories already produce the lionโs share of North American auto production.
According to data from S&P Global Mobility, there were 10.2 million cars built at US assembly plants last year, compared to 4 million at Mexican factories and 1.3 million in Canada. There are about 1 million workers at American factories producing cars, trucks and auto parts.
Increased investments
The Hyundai announcement comes ahead of April 2, when even more sweeping tariffs might be enacted, targeting countries with a large trade surplus like South Korea. Trump is encouraging investments in American manufacturing, with similar announcements being made by Taiwan Semiconductor Manufacturing Company and Japanโs SoftBank.
Apple said last month it would invest $500 billion to expand facilities, manufacturing and projects across the United States over the next four years. The announcement appeared to be aimed at helping the company avoid new tariffs on goods imported from China, although some of the investment efforts were likely already underway.
Oracle, OpenAI and SoftBank also announced in January that they would team up to create a new company, called Stargate, to grow artificial intelligence infrastructure in the United States. Together, the companies plan to invest $500 billion into the project in the coming years.
New presidents and presidents-elect have often held joint announcements with companies about massive US investments to promote American manufacturing. But their track record for success is mixed.
Trump and Foxconn announced in 2017 a $10 billion electronics factory in Wisconsin that was expected to create 13,000 jobs. But the company eventually abandoned most of its plans for the facility and the high-tech products it was supposed to build. The company in 2021 said it would invest just $672 million in a revised deal that would create fewer than 1,500 jobs.
The-CNN-Wire
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