South Korea’s POSCO, a leading steelmaker, is considering a partnership with Hyundai Steel to build a $5.8 billion steel plant in Louisiana, USA. This move comes as a response to the United States’ 25% tariff on imported steel. POSCO aims to share construction costs with Hyundai Steel while securing a portion of the steel output. This could help both companies mitigate the impact of the tariff.
Response to US Steel Tariffs
The recent US tariff on imported steel has encouraged POSCO to explore investment in Hyundai Steel’s project. Hyundai Motor Group plans to raise half of the 8.5 trillion won ($5.8 billion) investment for the plant through Hyundai Steel and external investors like POSCO. The remaining funds will come from loans. POSCO’s involvement would make it a key external investor. Negotiations are underway to decide the specifics of POSCO’s role and investment.
Overcoming Challenges and Advancing US Steel Production
POSCO has struggled to enter the US market in the past, with high labor costs derailing plans to build rolling mills in Alabama over a decade ago. However, this new partnership with Hyundai Steel offers POSCO an opportunity to gain a foothold in the US steel market. For Hyundai Steel, the collaboration could relieve some financial pressure and help overcome market challenges.
In March 2025, Hyundai Motor Group announced a $21 billion investment in the US for 2025-2028. This includes the $5.8 billion steel plant, which will have an electric arc furnace and a capacity of 2.7 million tons annually. The new plant will create over 1,400 jobs and supply advanced steel for the automotive sector.
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