South Korea just secured a ₩125.2 trillion ($86 billion) commitment from Hyundai, part of a bigger game tied to new U.S. tariff rules that were finalized Friday.
The five-year plan, which will run through 2030, marks the biggest-ever spending pledge from the company, according to officials who met Sunday at President Lee Jae Myung’s office in Yongsan.
It’s also a political gamble: in exchange for this investment and others, Seoul gets lowered tariffs from Washington, but domestic spending might take a hit.
President Lee, while hosting the chiefs of seven massive chaebol, made his worry clear. “It appears we have negotiated well.
Yet concerns remain that a surge in U.S.-focused investment could come at the expense of domestic spending,” he said. The new trade deal cuts tariffs on most Korean exports to 15%, down from 25%, in return for a $350 billion Korean investment package, capped at $20 billion annually.
But if Korea fails to meet its U.S. investment obligations, higher tariffs could slam them back. That condition was agreed behind closed doors and confirmed by the committee chaired by U.S. Commerce Secretary Howard Lutnick.
Hyundai pushes hard into AI, robotics, and U.S. parts relief
The Hyundai plan isn’t just about cars. Of the ₩125.2 trillion, about ₩50.5 trillion is earmarked for new tech like AI, robotics, software-defined vehicles, and hydrogen systems.
Another ₩38.5 trillion will go into R&D for existing mobility operations, and ₩36.2 trillion is tagged for routine operational investment. The company confirmed it will pay the entire cost of U.S.-bound tariffs for its top-tier Korean suppliers by rolling those costs into its U.S. component pricing.
Over 5,000 secondary and tertiary vendors are expected to benefit from this policy in the next few years.
Hyundai Executive Chair Euisun Chung said the focus will be on building a robot factory, a foundry, and an AI data center capable of supporting physical-AI use cases like autonomous driving and smart manufacturing.
That’s part of an ongoing partnership with Nvidia CEO Jensen Huang, who promised to send 260,000 GPUs to Korea, including 50,000 directly to Hyundai.
“We have hired 7,200 people this year, and will ramp up that to 10,000 next year,” Chung said. Most of those hires will go to vehicle software and mobility tech.
Hyundai also plans to boost its overseas shipments from 2.18 million vehicles to 2.47 million by 2030, while exports of EVs and hybrids are expected to more than double to 1.76 million in the same period.
Samsung, SK, LG, and Hanwha launch parallel mega-deals under tariff pact
Samsung committed ₩450 trillion ($310 billion) over five years, with a focus on expanding chip production and building a 15,000-GPU AI data center in South Jeolla via Samsung SDS.
Structural construction resumed on the long-delayed P5 plant in Pyeongtaek, which had been paused since 2024. Mass production is set to begin in 2028.
Samsung Electronics also wants in on the data center race. It’s opening a local production line for FlaktGroup, the European HVAC giant it bought in November, to supply its facilities.
On the hardware front, Samsung SDI picked Ulsan for its first mass-production line for solid-state batteries, while Samsung Display will launch OLED production in South Chungcheong next year.
“We remain committed, as pledged last September, to hiring 60,000 people per year,” said Samsung Electronics Chair Lee Jae-yong, adding that R&D and domestic infrastructure will stay a core priority.
SK Group threw in a ₩600 trillion commitment for domestic AI and chip investments and said it’ll hire 20,000 workers per year through 2029. The company is working with AWS to build one data center in Korea’s southeast and one with OpenAI in the southwest.
LG Group followed with a ₩100 trillion pledge; 60% of that will go to core parts, materials, and equipment. Hanwha announced a ₩11 trillion domestic plan focused on shipbuilding and defense. That’s alongside a $5 billion project in Philadelphia’s shipyard, plus interest in buying more U.S. yards.
The full $350 billion investment pact includes projects across semiconductors, energy, AI, shipbuilding, raw materials, and pharma, all to be finalized before January 2029, the last year of Donald Trump’s current term. Drug tariffs will be capped at 15%. But steel exporters weren’t so lucky; those tariffs stay at 50%.
Per the deal, all project funds must be deposited within 45 business days of U.S. site approval. Trump will personally pick each project, advised by Lutnick’s committee, and only if the projects are deemed “commercially reasonable” by Kim Jung-kwan, Korea’s industry minister.
Returns will be split evenly, 50/50 between Korea and the U.S., until the debt is repaid. After that? The U.S. takes 90% of the profit. Korea gets 10%.
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