Seoul: POSCO Group, South Korea's leading steelmaker, has announced its decision to invest in Hyundai Steel Co.'s steel mill project in the United States. This move is part of POSCO's strategy to navigate the tariffs on steel imports imposed by U.S. President Donald Trump.
According to Yonhap News Agency, POSCO Group has signed a memorandum of understanding (MOU) with Hyundai Motor Group. The agreement outlines POSCO's participation in Hyundai Steel's U.S. plant and aims to enhance collaboration in the steel and rechargeable battery sectors.
Last month, Hyundai Steel disclosed plans to invest $5.8 billion to construct an integrated electric arc furnace-based steel mill in Louisiana by 2029, with production expected to commence the same year. The facility, with a capacity of 2.7 million tons per year, is anticipated to supply steel to Hyundai Motor Co., Kia Corp., and other automakers in the U.S., a key market for automobiles globally.
POSCO's decision to invest follows the Trump administration's imposition of a 25 percent tariff on all steel and aluminum imports in mid-March. POSCO Group had previously indicated it was exploring investment in upstream steel processes in the U.S., with equity participation being one of several options.
"We have not yet determined the size of our stake in the plant project. Discussions will begin soon to decide the investment ratio and other related matters," a POSCO spokesperson commented.
In a message to employees, POSCO Group Chairman Chang In-hwa emphasized the need for global expansion. He stated, "With a sense of crisis that the company will fall behind if it does not act swiftly, we must invest in steel mills in fast-growing and high-margin regions, such as the U.S. and India, to achieve meaningful results."
POSCO Group anticipates that the MOU will strengthen its five-decade-long partnership with Hyundai Motor Group. As a major supplier of automotive steel to the automaker, POSCO will supply steel produced at the new Louisiana plant to customers in the U.S. and Mexico. The company will also collaborate with Hyundai on developing materials for rechargeable batteries to support future mobility solutions.