JAKARTA Hyundai Motor Group’s move to strengthen relations with the Donald Trump administration has drawn criticism from a number of parties in South Korea. The auto giant’s decision is considered at risk of damaging Korea’s position in trade negotiations with the United States.
Hyundai recently announced an increase in its investment commitment in the US from US$21 billion to US$26 billion, or around Rp431 trillion. The investment includes the development of the automotive, steel, and robotic sectors, and is claimed to create around 25,000 direct jobs by 2028.
But this move sparked criticism from the South Korean parliament. South Korean Industry Minister Kim Jung-kwan called Hyundai’s decision a “very unfortunate”, especially amid ongoing trade negotiations between the two countries.
He assessed that the policy could weaken Korea’s position in an effort to lower car import rates to the US. In line with that, independent lawmaker Kim Jong-min also emphasized that Hyundai seemed to be trying too hard to get close to the Trump administration.
“Isn’t the Korean-US tariff negotiations basically a negotiation about Hyundai? Because Hyundai is the main player in this matter, I believe the Hyundai way of responding is not helping with negotiations,” Kim said, quoted from Carscoops, Friday, October 17.
This increase in investment also comes at the wrong time. Just two weeks earlier, a Hyundai factory in Georgia, USA, was raided by immigration and customs agents, which resulted in hundreds of workers from Korea being detained.
The incident caused diplomatic tensions and public attention to economic relations between the two countries. Some analysts say Hyundai’s too aggressive move in the US market could worsen South Korea’s position in trade negotiations.
The Korean government is said to be trying to negotiate lower import rates for vehicles from Ginseng Country, while the total investment of Korean companies in the US has reached around 350 billion US dollars.
Although this expansion could provide long-term benefits for Hyundai on a business basis, observers warn that the company should be careful. Too close to the Trump administration could create an unfavorable political impression and potentially sacrifice Korea’s national interests in the international trade arena.
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