Background on Hyundai and its Relevance
Hyundai Motor Company, a prominent South Korean automotive manufacturer, has been a significant player in the global automobile industry for decades. Known for producing reliable and technologically advanced vehicles, Hyundai has established a strong presence in various international markets. In Mexico, the company operates a production plant in Monterrey, which has been responsible for manufacturing popular models like the Tucson.
Hyundai’s Production Decision in Response to US Trade Adjustments
Recently, the New York Post reported that Hyundai was considering shifting some Tucson production from Mexico to its Alabama factory in the United States. This news came after US President Donald Trump imposed a 25% tariff on imported automobiles, effective from April 3, 2025. Additionally, a 25% tariff on certain automotive parts was set to take effect no later than May 3.
Mexico’s Export Advantage and the T-MEC Agreement
Mexico’s automotive exports to the United States will face a lower average tariff compared to other countries due to a new methodology that will proportionally discount the value of US-origin automotive parts integrated into exported vehicles. Importers under the Transpacific Trade Agreement (T-MEC) between Mexico, the United States, and Canada will have the opportunity to certify their US content. Systems will be implemented so that the 25% tariff only applies to non-US content.
Hyundai’s Investment in the US Market
Despite these trade adjustments, Hyundai has announced a significant investment in the US market. At the end of March, Hyundai’s CEO Euisun Chung announced a $21 billion investment over the next four years during a meeting at the White House. This investment includes constructing a steel plant in Louisiana, valued at $5.8 billion – Hyundai’s first in the United States.
Hyundai’s Confirmation of Continued Tucson Production in Monterrey
Marcelo Ebrard, Mexico’s Secretary of Economy, confirmed on social media platform X that Hyundai will continue producing the Tucson model in Monterrey. Carlos Carrasco, Hyundai’s Legal Director and Government Relations Officer, confirmed this information to Ebrard.
Hyundai’s Explanation for the Decision
According to Ebrard, Hyundai will redirect Tucson production to other countries with free trade agreements. This decision aims to adapt to the changing US trade landscape while maintaining Hyundai’s commitment to Mexico.
Key Questions and Answers
- What is Hyundai’s decision regarding Tucson production in Mexico? Hyundai will continue producing the Tucson model in Monterrey, Mexico.
- Why did Hyundai initially consider shifting Tucson production to the US? The decision was prompted by recent US tariff announcements on imported automobiles and automotive parts.
- How will Mexico’s automotive exports to the US be affected by these tariffs? Mexican exports will face a lower average tariff due to a new methodology that accounts for US-origin automotive parts in exported vehicles.
- What investments has Hyundai announced in the US market? Hyundai plans to invest $21 billion in the United States over the next four years, including building a steel plant in Louisiana.
- How will Hyundai adapt to the changing US trade landscape? Hyundai will redirect Tucson production to other countries with free trade agreements, maintaining its commitment to Mexico.
