South Korea’s Posco Holdings plans to join its peer Hyundai Motor Group in building a steel plant in the United States (US).
The plant represents a $5.8-billion (R109-billion) investment that President Donald Trump has used to claim success for his controversial tariff policy.
The industrial heavyweights have signed a memorandum of understanding on joint participation in the Louisiana steel project, according a statement from Hyundai.
It didn’t give the possible scale of Posco’s equity investment in the new mill, which is expected to have an annual production capacity of 2.7 million tons and start operations in 2029.
Posco is South Korea’s biggest steelmaker, while Hyundai is the second-biggest via its subsidiary Hyundai Steel Co.
“The Louisiana steel mill will enable the Group to deliver a reliable and stable supply of high-quality next-generation automotive steel sheets to its major production bases in the U.S.,” the statement said.
Hyundai’s plan was unveiled in late March — after Trump had imposed steel tariffs but before his “reciprocal” duties — and formed one part of a $21 billion (R3995-billion) US investment push by the South Korean firm, including boosting vehicle production.
At the time, the president claimed the project was a “clear demonstration” that tariffs work to spur domestic manufacturing.
Senior South Korean trade officials are heading to Washington this week to persuade the Trump administration to ease or eliminate tariffs on its goods.
The Asian export powerhouse was handed a 25% across-the-board levy that was later reduced to 10% for 90 days, but it also faces separate 25% tariffs on cars, steel and aluminum.
The two firms will also cooperate in the battery sector, said Hyundai, the world’s third-largest carmaker.
“This is expected to contribute to securing battery raw materials that comply with supply chain dynamics and regulations in the U.S. and Europe,” it said in the statement.
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