Hyundai Motor Group faces lasting US policy risks after midterms

By Lee Min-hyung

• Published Nov 4, 2026 2:09 PM KST
• Updated Nov 4, 2026 5:59 PM KST

Massive US investment offers little protection against shifting trade policies

Hyundai Motor Group's massive investment in the United States is unlikely to shield the automaker from Washington's shifting trade policies, even after Democrats secured control of both chambers of Congress in Tuesday's (local time) midterm elections, a trade expert said Wednesday.

The Democratic takeover of the House of Representatives and Senate is expected to strengthen congressional scrutiny of U.S. President Donald Trump's trade agenda, but is unlikely to fundamentally reverse Washington's push to revive domestic manufacturing, according to Shin Won-kyu, head of the global economic research team at the Federation of Korean Industries (FKI).

The automaker remains particularly vulnerable to changes in U.S. tariff and trade policies because of its growing investment in local factories and supply chains, which could limit its flexibility in responding to future policy shifts, the expert said.

"The biggest risk is weakened bargaining power after the investment is made," Shin said in a written interview with The Korea Times. "Plants cannot easily be moved once built, while tariff rates or calculation methods can change with a single proclamation."

Hyundai Motor Group is considered one of the hardest-hit corporations by the U.S. Donald Trump administration's tariffs, which have been in effect since April last year. Its heavy reliance on exports to the U.S. has left it particularly exposed to the impact of auto tariffs.

Identifying the tariff-sparked trade uncertainty as a long-term risk, Hyundai Motor Group has pledged to commit $26 billion (35 trillion won) for investment in the U.S. between 2025 and 2028, with a focus on expanding localized production there.

The carmaker is building an extensive U.S. manufacturing network, spanning steel production and finished vehicles. Its planned Louisiana steel mill, scheduled to begin operations in 2029, is part of the group's effort to establish a more localized supply chain.

Such investments, however, do not necessarily guarantee favorable trade treatment, Shin said. Instead, Korean companies must demonstrate how their operations contribute to U.S. manufacturing, employment and domestic sourcing to strengthen their position in negotiations with Washington.

"Hyundai Motor Group should quantify its contribution to U.S. sourcing and jobs, and make the case to both parties that it is part of American manufacturing," he said.

The Democratic Party's victories in both chambers are expected to give lawmakers greater room to scrutinize the Trump administration's trade policies. However, Shin said the change in congressional control would not necessarily translate into a significant easing of trade pressure on Korean manufacturers.

While Republicans have relied more heavily on tariffs to encourage domestic production, Democrats have generally favored subsidies and stricter labor and origin requirements. Both parties, however, share an interest in rebuilding U.S. manufacturing capacity in industries considered critical to national and economic security.

"The two parties differ in their tools, but there is a bipartisan consensus on reviving U.S. manufacturing, centered on economic security industries," Shin said.

This means Korean companies should not expect the Democratic takeover of Congress to bring an immediate improvement in trade conditions. Although stronger congressional oversight could constrain some aspects of the administration's trade agenda, major changes to existing tariff measures would remain difficult, particularly given Trump's executive authority over trade policy.

For Korean automakers and steelmakers, the distinction between tariff levels and the way tariffs are administered will be particularly important.

The 15 percent tariffs on Korean automobiles and 50 percent duties on steel remain significant burdens. Shin said changes in congressional control would be more likely to affect how such measures are implemented than to bring substantial near-term reductions.

A Democratic-controlled House could exercise stronger oversight of trade policy, potentially improving predictability for businesses, but that would not necessarily translate into lower costs, as Korean companies could face tighter requirements on product origins, labor standards and exports to China, even if tariff policies become less volatile, he said.

"Companies should prepare for an environment where tariffs swing less, but the rules become more demanding," Shin said.

He pointed to stricter origin requirements and export controls on advanced artificial intelligence chips as areas where bipartisan agreement could sustain regulatory pressure on foreign manufacturers.

For Korean steelmakers, Shin recommended emphasizing their role in addressing global overcapacity driven by China, while differentiating their products through high-grade automotive steel and stronger origin-tracking systems.

More broadly, he said Korea should use sectors in which Washington also depends on Korean expertise, including shipbuilding, power equipment and batteries, to rebalance bilateral economic relations.

Rather than relying solely on tariff negotiations, Seoul should push for a framework based on reciprocal investment and industrial cooperation, he said.

At the same time, Korean companies must avoid weakening their domestic industrial foundations through excessive overseas expansion.

Shin advocated what he called a "just-in-value" approach, under which research and development, core materials and high-value components remain in Korea, while production facilities requiring direct access to the U.S. market are established locally.

He also stressed the need for Washington to facilitate the implementation of existing investment commitments by addressing practical obstacles, including visas for skilled Korean workers and delays in permits.

"The Korea-U.S. alliance should be emphasized as a relationship of trust that goes beyond short-term political interests," he said.