What do tariffs mean for carmaking and US communities? Clues from one Georgia town.
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Patrik Jonsson Staff writer
| Pembroke, Ga.
President Donald Trump鈥檚 tariff plan appears focused around a simple tenet for any manufacturer: Produce in the United States if you want unfettered access to U.S. markets. If that鈥檚 the demand of this moment, Hyundai Motor Group of South Korea looks in some ways like a brilliant strategist.
Back in 2022, months before then-President Joe Biden approved credits for buying electric vehicles, and long before the sharp rise in tariffs that President Trump has announced recently, Hyundai signed the biggest economic development deal in Georgia鈥檚 history.
This new $7.6 billion EV factory broke ground just over two years ago in a massive pine grove just west of Savannah, Georgia.
Why We Wrote This
South Korea鈥檚 Hyundai is investing big near Savannah, Georgia. It鈥檚 bringing auto jobs, but it鈥檚 not a panacea for the effects of tariffs, and residents see costs as well as benefits for their community.
Last week, nearly 2,000 American Hyundai employees started churning out vehicles, aided by a horde of robots directed by dozens of South Korean nationals now working for Hyundai in the U.S.
Then last month, as the Trump administration readied tariffs on foreign-sourced materials, the carmaker announced it was building a new steel mill in Louisiana.
鈥淢aybe [Hyundai鈥檚 leaders] are very prescient and can think that far ahead,鈥� says , a political science professor and an expert on Southern politics at the University of Georgia in Athens. 鈥淏ut the fact is, they are very well positioned, by accident or whatever.鈥�
But if the company is becoming better positioned for U.S. production, the story of its Ellabell, Georgia, plant also reveals how hard it is for any manufacturer to truly win from the current landscape of high and uncertain tariffs.
Among the challenges: The tariffs will still affect Hyundai, like other auto companies producing in the U.S., to the degree that parts are imported. What鈥檚 more, the new Georgia plant was supposed to produce only electric vehicles. But as the Trump administration is moving away from special support for EVs, Hyundai recently announced the factory will also build hybrid vehicles.
A larger question hangs over the community here: How beneficial will a factory like this one be for local life and livelihoods?
The auto industry is exceptionally complex and capital-intensive. The new Hyundai Metaplant here raised its curtain late last month on a rearranged stage. The arrival of heavy tariffs is accompanied by a sharp slump in stock markets. Carmaker Stellantis announced and factory downtime affecting U.S., Canadian, and Mexican plants 鈥� a sign of how tariffs may destabilize both supply chains and consumer demand.
Charging ahead
But Hyundai, which saw in March, is charging ahead. President Biden and President Trump have both hyped their roles in Hyundai鈥檚 total U.S. investment.
The massive plant, located in Ellabell, about 25 miles outside Savannah, may eventually employ as many as 8,000 people. It is already changing the demography and economy of the area of Georgia known as the Coastal Empire 鈥� the barrier islands, marshes, and swampy lowlands of southeast Georgia that support a thriving coastal economy.
Presidents and cars
Mr. Trump isn鈥檛 the first president to focus on the auto industry鈥檚 outsize role in the . President Ronald Reagan negotiated import limits on foreign-built cars, temporarily raising consumer costs. Two major U.S. automakers were bailed out under President Barack Obama during the Great Recession. President Biden also signed the Inflation Reduction Act, which featured $7,500 tax rebates on electric cars.
Now comes President Trump鈥檚 dramatic move this past week, erecting what amounts to a nearly . But that wall creates economic and political risk alongside its incentives for manufacturers to build more American factories.
As a result of the tariffs, Fitch Ratings just downgraded its U.S. car . In anticipation of the tariffs 鈥� which include a for all goods and on imported cars 鈥� consumer sentiment continued a drop in March, reaching its lowest levels since November 2022, according to research by the University of Michigan.
Against that backdrop, the White House is asking Americans to trust that short-term price pain and potential domestic layoffs will yield a new 鈥済olden age鈥� of higher wages, more jobs, and revived communities.
Testing tariff support, changing factory towns
鈥淭ariffs have redistributional effects,鈥� says , an international economist who teaches at the University of Notre Dame in Indiana. 鈥淏ut who are the winners and losers?鈥� he asks.
鈥淚鈥檓 not sure what the administration is going to learn when they do this and people go out and pay $7,000 more to buy a car,鈥� says Professor Johnson, a trade policy expert. 鈥淭hat鈥檚 going to test the depths of anti-trade support.鈥�
Edmond Foss, a retired truck driver living near the Hyundai factory, voted for Mr. Trump. But he worries that the president鈥檚 sweeping gestures 鈥� not just on trade 鈥� are more show than substance. 鈥淗ere鈥檚 a guy who wants to put an American flag on Mars. I mean, what鈥檚 the point?鈥�
He says those concerns may be echoing in other places across the U.S. Mr. Foss has already seen the impact here in Pembroke, a sleepy railroad town just a few miles down U.S. Route 280 from the new car plant.
鈥淣ot everyone is behind it,鈥� he says. 鈥淭raffic is growing. Houses are going up everywhere. It feels overwhelming.鈥�
Bobby Kaskela, a local carpenter, agrees that 鈥淭here鈥檚 no doubt we鈥檙e going to see some dramatic changes.鈥� But to his way of thinking, Pembroke will ultimately benefit from a renewed focus on domestic manufacturing, even if it raises prices.
Behind the scenes, the city has quietly been preparing for the opening of the Hyundai factory, increasing the housing stock and the capacity of the town鈥檚 wastewater treatment plant. In the past, a standard subdivision held about 30 homes. In recent months, Pembroke officials have heard developers pitch new subdivisions with 360 homes each.
鈥淚f you don鈥檛 revise, you鈥檒l die; if you don鈥檛 adapt, you鈥檒l be left behind,鈥� says Chris Benson, the city administrator . 鈥淚 would love to have a parking problem in downtown Pembroke, which we currently don鈥檛 have. At the same time, when people see something they鈥檝e never seen before, it generates a lot of fear and concern.鈥�
Manufacturing vision or just great timing?
But it is unclear whether the boom here in Pembroke will represent President Trump鈥檚 vision coming to fruition.
鈥淚 think places like Pembroke will be managing growth rather than decline, and that鈥檚 a much better problem to have to deal with overall,鈥� says Professor Hood, the director of the Survey Research Center at UGA. 鈥淏ut whether we鈥檙e going to bring back the heyday of American manufacturing 鈥� sort of 1950s post-World War II 鈥� I鈥檓 dubious that鈥檚 going to happen. The administration can try to control the market, but [the market] still has a huge sway over itself.鈥�
Republican Rep. , who grew up along the Savannah River, points out聽that Americans import vastly more聽cars from the European Union聽than聽the EU imports from the U.S.
To his way of thinking, unfair trade deals 鈥渉ave been going on for a long time and, like any situation like this, the longer you let it fester, the harder it is to address,鈥� said Representative Carter in an interview with the Monitor. Mr. Carter represents Georgia鈥檚 1st District, including the metro Savannah area. 鈥淎nd President Trump is ,鈥� he added. 鈥淎nd, yes, addressing that is probably going to cause short-term pain. But long-term is what he鈥檚 thinking about.鈥�
Higher salaries, good food, and family values
At last week鈥檚 plant opening, several workers gave speeches pointing to the new jobs that this new plant will provide to this area of rural Georgia. Hyundai鈥檚 wages run to almost $60,000 yearly, compared with the per capita income surrounding Bryan County. Managers play up cultural similarities to promote camaraderie on the shop floor. Hyundai has repeatedly credited the quality of the U.S. workforce in Southern states as a reason for their investments.
At the grand opening, Hyundai Motor Group CEO Jos茅 Mu帽oz credited relationships, not politics, for his company鈥檚 decision to bet large on the U.S.
鈥淎merica has become, by far, the largest market for the group,鈥� he . 鈥淲e invested because we saw the opportunity, not because of who was president or what incentives were on the table.鈥�
Chris Winfreed, a lifelong Pembroke resident, is graduating from high school in May and has enlisted in the Air Force for a commission of at least three years. He says that, for now, he is not considering possible opportunities at Hyundai for when he returns. To him, all the talk of tariffs and jobs can overshadow what he considers key community virtues 鈥� like natural beauty and simple, small-town life.
鈥淭hey鈥檙e building houses and restaurants, but they haven鈥檛 even fixed the roads yet,鈥� he says. 鈥淒o I think Pembroke will get bigger? Yes, I do. Will it get better? That, I am not so sure about.鈥欌��
