Days after South Korea finalised a trade deal with the United States, in which the latter reduced tariffs on South Korean autos from 25 percent to 15 per cent, Hyundai Motor Group announced on Sunday that it will invest 125.2 trillion won ($86.47 billion) in South Korea from 2026 to 2030.
Earlier, the firm had made investments with its group affiliate Kia Corp of 89.1 trillion won from 2021 to 2025.
On Sunday, South Korean President Lee Jae Myung met with Hyundai Motor Group Chairman Euisun Chung and other business leaders.
Speaking after the meeting, the Hyundai Motor Group chief said that the firm is well aware of the concerns related to the decline in exports and shrinking domestic production following the US tariffs of 15 per cent on South Korea.
He added that Hyundai would now aim to diversify export markets, increase exports from domestic factories, and double auto exports through new electric-vehicle factories by 2030. Apart from this, he also added that the group will also provide support to auto parts makers, who have been hit by the US tariffs.
According to the details, the Hyundai Group plans to invest 50.5 trillion won in AI and other future business opportunities, while 48.4 trillion won of the domestic investment will be allocated for research and development. Apart from this, the group will spend 36.2 trillion won on optimising production facilities and building a skyscraper.
US-South Korea Trade Agreement:
Earlier on Friday, the US and South Korea released a joint fact sheet on a trade deal. Both Washington and Seoul agreed to set tariffs on US imports of Korean autos and auto parts at 15 per cent. This brings the tariff rate on South Korea in par with Japanese competitors.
Previously, the US imposed a 25 per cent tariff on Korean goods.
Under the trade agreement, South Korea would make an investment of $350 billion in the United States, which would be capped at $20 billion a year in an effort to maintain won stability.
The Asian country would pay $200 billion in cash in phased installments to the US, while the remaining $150 billion would be earmarked for shipbuilding cooperation.
What Has The US Agreed On?
The United States agreed on a 15 per cent tariff rate for South Korean imports of wood products and pharmaceuticals. The US relaxed tariffs on imports of South Korean aircraft parts and generic drugs.
The US also agreed on providing assistance to South Korea in building nuclear-powered strategic submarines at a shipyard in Philadelphia-run by South Korean conglomerate Hanwha.
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