2 Companies Investing Billions in US Factories To Avoid Tariffs

According to Investopedia: “Chaebols are owned, controlled, and/or managed by the same family dynasty, generally that of the group’s founder. Family members are usually placed in management positions, giving them more control over the way the businesses operate. Some of the originating families aren’t necessarily majority stakeholders in the chaebols but they may  still have some association with them.” 

Chaebols hail from South Korea, but their structure is not unique, and can easily be seen with the Murdoch family in News Corp (NASDAQ: NWSA), the Walton family in WalMart (NYSE: WMT), and others. Chaebols that are particularly familiar in the US are: Hyundai Motor Group (OTC: HYMLF) and Samsung Electronics Co. Ltd. (OTC: SSNLF). Due to their large US presence, both Hyundai and Samsung found themselves subject to the Trump Administration’s reciprocal tariff policy announced in March, 2025, and have capitulated with multibillion dollar US investments to avoid the tariff consequences. 

Treating Korea As An Equal

It’s no secret that South Korea has made huge economic and cultural gains in the world, especially in technology, engineering, and especially in film and music, where K-Pop routinely dominates pop music charts and concert arenas, while cutting edge film and tv shows like Parasite (2019) and Squid Game (2021-2025) garner worldwide acclaim. 

South Korea’s accelerated rate of progress has been built on substantial aid from the US. In addition to military security to keep the DMZ and nuclear threats from North Korea in check, the US has also allowed South Korea a sweetheart unbalanced trade deal that included such terms as:

• A South Korean average tariff on US agricultural goods of 54%.
• A 6.2% South Korean tariff on US industrial goods.

By contrast, the average US tariff on Korean agricultural goods was 9%, and 3.2% for industrial goods. That all changed earlier this year when President Trump announced his reciprocal tariff policy in March to reset global international trade between the US and the rest of the world. 

Hyundai Motor Group

Founded in 1947, Hyundai is one of South Korea’s most prominent chaebols. It is controlled by the descendants of founder Chung Ju-yung. Not unlike GE, Hyundai had grown to such a huge conglomerate by 1997 that it wound up splitting into separate entities, which also included Hyundai Department Store Group and Hyundai Heavy Industries. 

As of early 2025, Hyundai commanded an 11% US market share, breaking its previous sales record with 836,802 units sold in 2024, roughly worth $29 billion. In response to the tariff announcement, Hyundai committed a $21 billion US investment (increased to $26 billion in August). The investment entails:

• A $5.8 billion steelmaking and processing plant in Louisiana for auto production.
• A new $7.59 billion auto factory in Georgia with a target production goal of 1.2 million annual units.
• $6 billion in supply chain management enhancement upgrades.
• A new robotics facility – annual 30,000 unit capacity.
• $3 billion of US LNG for energy security. 

Samsung Electronics Co. Ltd.

As one of the most popular manufacturers of Android phones, Samsung smartphones have consistently outsold Apple’s iPhones, most recently 61.4 million Galaxy units vs. 58.6 million iPhones in October, Samsung’s TVs, batteries, appliances, semiconductors,  insurance, and construction operations have made it South Korea’s largest chaebol since its founding 1969. The descendants of Lee Byung-chul continue to control the Samsung chaebol, and the family’s notorious scandals have served as fodder for a number Korean soap-opera dramas and movies. 

Samsung is hugely dependent on the US market, with 39% of its 2024 sales, (roughly worth $85 billion) derived from North America. Therefore, it’s no surprise that Samsung also capitulated in response to the White House tariff announcement. Samsung committed a $37 billion US investment in early June, 2025. Intended use of proceeds include:

• A new semiconductor factory in Taylor, Texas.
• Expansion of the current factory in Austin, Texas.
• A new R&D facility.
• Creation of over 15,000 jobs in Texas. 
• The investment is also supported by the US Commerce Department under the CHIPS Act agenda to boost US semiconductor production. 

A Successful New Trade Agreement

President Trump’s October meeting with President Lee Jae-myung in South Korea led to a very successful new trade agreement which reduced reciprocal tariffs. Key changes included:

• South Korea agreed to lower its tariffs to an average 15% vs. the prior average 25% rate.
• US Agricultural product tariffs have been reduced. 
• Specific processed food item tariff reductions include:
  • Pet food: South Korea’s 5% tariff will be reduced to zero.
  • Chocolate bars: South Korea’s 8% tariff will be phased out over 5 years.
  • Wine: South Korea’s 15% tariff will be reduced to zero immediately.
  • Distilled spirits: South Korea’s tariffs will be phased out over 5–10 years.
  • Beer: South Korea’s 30% tariff will be phased out over 7 years. 

A subsequent disclosure published in Reuters also revealed that approvals were given for South Korean nuclear submarines to be built in Pennsylvania shipyards for furthering South Korean national security. Additionally, the U.S. will cut tariffs on South Korean products including autos to 15% from 25%. Semiconductors will be subject to tariff terms no less favorable than those for Taiwan.