South Korea's industry minister on Saturday urged the United States to ease tariffs on equipment that Korean companies will need to import for a US$5.8 billion steel mill they are building in Louisiana.

Industry Minister Kim Jung-kwan raised the request during a meeting with Louisiana Gov. Jeff Landry, ahead of a groundbreaking ceremony for Hyundai-POSCO Louisiana Steel LLC (HPLS), according to a press release from the Ministry of Trade, Industry and Energy. HPLS is an electric arc furnace-based integrated steel mill, with construction scheduled to begin in the fourth quarter. Electric arc furnace mills, which melt scrap-based feedstock rather than relying on iron ore and coking coal, are widely viewed as a lower-carbon route to steel production compared with traditional blast furnace operations.

The venture is a joint undertaking by Hyundai Motor Group affiliates Hyundai Steel Co., Hyundai Motor Co. and Kia Corp., together with steelmaker POSCO.

The ministry noted that foreign steelmakers operating in the US face tariffs under Section 232 of the Trade Expansion Act of 1962 — a provision that allows the US president to adjust imports deemed to threaten national security — as well as other trade remedy measures. Section 232 has been the legal basis for US steel tariffs since 2018, when the measures were first imposed, and has remained a persistent point of friction in Washington's trade relations with allies including South Korea, the European Union and Japan.

Kim called on Washington to pay close attention to the difficulties confronting Korean companies investing in the US, and to support the project by easing tariffs on equipment and materials that must be shipped from South Korea.

He underscored the project's significance, saying it is expected to strengthen supply chain cooperation between the two countries by pairing South Korean steelmaking technology with US industrial and energy infrastructure, the ministry said.

Once operational, the plant will supply automotive steel to global automakers' production facilities in the southern United States and Mexico, including those run by Hyundai Motor and Kia. The location reflects the broader concentration of automotive assembly capacity in the US South, where Hyundai, Kia and other global automakers have expanded manufacturing footprints in recent years.

Hyundai Motor Group Executive Chair Euisun Chung, POSCO Group Chairman Chang In-hwa and South Korean Ambassador to the United States Kang Kyung-wha attended the groundbreaking ceremony.

Chung said automotive steel produced at the Louisiana plant would help Hyundai Motor Group and US automakers develop next-generation mobility solutions.

"Hyundai Steel is already showing the scale of what transformational investment can mean for Louisiana," Louisiana Economic Development Secretary Susan B. Bourgeois said. "This project is creating work for Louisiana companies, building a workforce around high-value manufacturing and driving new activity across the region before production has even begun."

The project forms part of Hyundai Motor Group's $26 billion US investment plan announced last year.

Hyundai Steel said in March 2025 that it would invest $5.8 billion to build its first steel mill in North America, with commercial production scheduled to begin in 2029.

POSCO holds a 20 percent stake in the project, while Hyundai Steel, Hyundai Motor and Kia hold 50 percent, 15 percent and 15 percent, respectively. (Yonhap)