Hyundai Motor, POSCO Complete Steel-Auto Supply Chain in US

Hyundai Motor Group Chairman Euisun Chung particularly garnered attention by expressing his desire to supply steel to SpaceX.

Hyundai Motor Group has expanded its finished vehicle production capacity in the US to over 1 million units, but has faced difficulties in procuring automotive steel sheets. If the Louisiana steel plant operates successfully, it is expected to avoid tariff pressure and secure a stable supply chain amidst changing trade environments. This holds significant meaning in completing the overall supply chain, from steel to automobiles and even robots, locally in the US.

Steel products have thin margins, but in the US market, there is uncertainty that tariffs could rise to 50% or even 70%. In this situation, the ability to stably supply steel within the US is analyzed to become an even more important value in the next 5 to 10 years. Therefore, the local US plant will be operated with supply stability as its top priority.

In particular, in June, monthly exports surpassed $102 billion for the first time ever, boosting these expectations.

Semiconductors currently account for the largest share of South Korea's exports, making up 40% of total exports. In particular, with the surge in demand for SSDs for computers and AI servers, exports in this sector have increased 3.6 times. In contrast, automobile and auto parts exports decreased by 4-7% this year, analyzed as an impact of the shift from direct exports to the US to local production in the US.

While South Korean cosmetics exports decreased by 3.6% due to the impact of patriotic consumption in China, agricultural and fishery products such as ramen and beverages increased by 15%, and fashion items by over 30%, showing the strong presence of Korean consumer goods in the Chinese market.

This is analyzed not as a decline in the competitiveness of the Korean automobile industry in the US market, but as a structural change where exports decreased due to the shift to local production.

It is reported that the South Korean government delayed due to being too cautious in selecting investment locations. This fund is more of a diplomatic complement to resolve trade issues than a focus on returns.

Korean semiconductor companies, such as Samsung Electronics building a plant in Taylor and SK hynix constructing a packaging plant, are showing strong commitment to securing a semiconductor supply chain in the US. The US is continuously demanding semiconductor investment from South Korea, and the Korean government plans to strengthen additional negotiations with the US based on these existing investment cases.

However, the burden of a unilateral deployment is significant, necessitating the development of a diplomatic strategy.

France is pursuing activities focused on protecting the safety of vessels in the region through international cooperation, rather than direct participation in war. If South Korea joins this international alliance with France, it could be a diplomatic solution to meet US demands under the pretext of vessel protection, not war participation.

Deployment decisions are crucial matters that can significantly impact diplomatic relations, requiring a cautious approach. In particular, the prevailing opinion is to avoid situations involving unilateral military operations with the US. South Korea is expected to resolve the deployment issue by maintaining international cooperation, such as participating in the UK- and France-led initiative for freedom of navigation in the Strait of Hormuz.

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