Hyundai Steel, a steelmaker under Korean auto conglomerate Hyundai Motor Group, is considering building an automotive steel mill in the United States as a strategy to deal with incoming Donald Trump administration’s trade protectionism.

According to industry sources and media reports on Wednesday, Hyundai Steel is in talks with various states in the southern region of the US such as Georgia, Louisiana and Texas to discuss establishing a plant there.

The amount of investment for the new production site is estimated at about $7 billion. Hyundai Steel is reportedly aiming to confirm the site and begin construction in the spring next year with the goal to complete the construction in 2029.

Hyundai Steel CEO Seo Gang-hyun previously said the company is reviewing setting up an overseas production foothold to respond to global protectionism at a general meeting of shareholders in April last year, noting that it will carry out a thorough assessment of where to invest to overcome trade barriers.

Hyundai Steel, however, denied the rumors in a regulatory filing, explaining that it is exploring various methods to secure sustainable growth and global competitiveness but no official decisions regarding the establishment of a US plant have been made yet.

Should Hyundai Steel decide to go ahead with the reported plan, it will mark the company’s first overseas steel mill. If established, the Korean steelmakers’ products are expected to be supplied to the US footholds of Hyundai Motor Company and Kia, the Korean auto conglomerate’s two brands, which are operating manufacturing plants in the states of Alabama and Georgia, respectively. Hyundai Motor has also set up a new electric vehicle-focused plant in Georgia.

Hyundai Steel currently produces about five million tons of automotive steel per year. About 83 percent of that is supplied to Hyundai Motor and Kia.

The first Trump administration imposed a quota of allowing Korea to export up to 2.68 million tons to the US per year in 2018. The Korea Chamber of Commerce and Industry projected that the second Trump administration is likely to impose tariffs on Korean made steel products and reduce the annual quota with its America-first policies.

By Kan Hyeong-woo (hwkan@heraldcorp.com)