Despite Hyundai's major U.S. investment plan, Trump imposes 25% tariffs on imported cars

Welcome to Within The Frame, where we bring the most pressing issues across the globe into focus, I'm Kim Mok-yeon.

South Korea's Hyundai Motor Group on Monday announced a sweeping 21 billion dollar investment in the United States, including a new 5 billion dollar steel plant in Louisiana, through 2028.

The plan includes investment for the automotive sector, the steel industry, and for future industries and the energy sector.

"Hyundai Motors entered the U.S. in 1986. Since then, we have invested over 20 billion dollars and now support more than 570,000 American jobs across all 50 nation states. Today, I'm pleased to announce an additional 21 billion dollars in a new investment over the next four years. Our largest U.S. invest ever.”

The announcement comes as U.S. President Donald Trump signals potential 25 percent tariffs on imported cars starting April 2nd and broadens trade pressure on countries with large U.S. trade surpluses.

Calling Hyundai a truly great company, the U.S. President expressed excitement.

“Hyundai will be producing steel in America and making its cars in America. And as a result, they'll not have to pay any tariffs. You know, there are no tariffs If you make your product in America.”

Monday’s announcement made Hyundai the first South Korean company to unveil a major investment plan amid Trump’s tariff threats — raising cautious hopes it could help ease U.S. trade pressure on Seoul.

For a deeper discussion on the latest developments, we invite Song Soo-young, Professor of Business and Economics at Chung-Ang University. Welcome.

Also joining us from Texas is Hwagyun Kim, Professor of Banking and Finance at Texas A&M University's Mays Business School. Great to have you.

1. (Song) So Prof. Song, Hyundai Motors announced a massive 21 billion dollar-investment in major sectors including automobiles, parts, and steel throughout the next three years. What is the significance of Hyundai’s large-scale investment? And why did Chairman Chung Eui-sun specifically highlight steel plant construction as a core aspect of the investment?

2. (Kim) Regarding Chairman Chung’s investment announcement, President Trump emphasized that it “proves the effectiveness of the tariff policy.” What has been the local response?

3. (Song) Hyundai’s investment is seen as a bold move to directly counter the Trump administration’s tariff pressure. What lessons does this case offer to domestic companies and the government in terms of resolving tariff-related issues?

4. (Kim) However, Hyundai Motor has only avoided the tariff pressure for its vehicles produced locally in the U.S. Since President Trump has announced that 25% tariffs will be imposed on all imported cars starting April 2nd, what kind of countermeasures should be considered in response?

5. (Song) Following Hyundai, will major Korean companies like Samsung Electronics and SK hynix also accelerate investments in the U.S.? Given the uncertainty around receiving subsidies under the Biden administration’s investment terms, further investment might be burdensome. What is your outlook?

6. (Kim) The Trump administration has declared that reciprocal tariffs will be imposed starting April 2nd. Is there a possibility that Korea is included among the so-called “Dirty 15” countries targeted? And how would such tariffs be implemented?

7. (Song) On the other hand, after Chung’s announcement, President Trump stated that “not all new tariffs will be announced on April 2nd” and that “some countries may receive exemptions.” This is a shift from his previous stance that “there will be no tariff exemptions.” Can this be interpreted as a sign of flexibility in his tariff approach?

8. (Kim) Meanwhile, President Trump has encouraged Korea’s participation in the Alaska LNG (liquefied natural gas) project. In relation to this, Alaska Governor Mike Dunleavy visited Korea for discussions. Could Korea’s participation in the Alaska project become a bargaining chip to alleviate tariff pressure? What should the Korean government consider before making a decision?

9. (Song) With the Trump administration’s reciprocal tariff announcement just a week away, newly reinstated Prime Minister Han Duck-soo declared that he would dedicate efforts to safeguarding national interests amid this trade conflict. From Korea’s perspective, what other cards could be offered to the U.S. to avoid or reduce reciprocal tariffs?