US immigration raid jolts South Korea, stirs investor anxiety
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US Immigration and Customs Enforcement agents rounded up about 475 workers at a construction site in Georgia, with 300 of them being South Korean nationals.
PHOTO: AFP
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The immigration raid on a Georgia electric vehicle battery plant run by two South Korean firms has rattled Seoul, coming less than two weeks after President Lee Jae Myung’s White House meeting with US President Donald Trump where South Korean companies pledged to invest hundreds of billions in the US.
South Korean officials worked over the weekend to secure the release of 300 of its citizens detained at a construction site
South Korea said it will send a chartered plane to get them home once administrative procedures are completed.
The crackdown comes at a fraught moment, shortly after Mr Lee and Mr Trump held a summit
The deal included a US$350 billion (S$449 billion) fund to support South Korean firms expanding in the US, with US$150 billion earmarked for shipbuilding.
Private companies pledged an additional US$150 billion in direct US investment.
The raid has put Mr Lee’s government under pressure at home and threatens to become a major diplomatic flashpoint with one of Washington’s closest allies.
It was front-page news for most of South Korea’s daily newspapers on Sept 6, with footage of workers shackled at the wrists, waist and ankles and marched onto buses causing rage.
Chosun Ilbo, the nation’s most circulated newspaper, carried a photo on Sept 6 of detainees putting their hands up against a bus, and published images from what it said were the detention facilities in Georgia, asserting they were infamously “covered in mold, worse than prisons”.
“It feels like a stab in the back,” Professpr Kim Tae-hyung, the chair of the political science department at Soongsil University in Seoul, said of the raid. “Most Koreans can’t help but feel infuriated” and South Korean companies will “inevitably” be discouraged from proceeding with investment plans in the US, Prof Kim said.
The raid now casts a shadow over South Korea’s multibillion-dollar US investment drive.
The detention of workers tied to a flagship South Korean investment could be seen by companies as an indication that the political and compliance risks of building in the US are greater than expected.
Hyundai Motor had pledged last month to increase its investment in the US to US$26 billion through 2028, from US$21 billion the company initially unveiled in March as it seeks to expand autos, steel and robotics production.
Its shares have risen 3.8 per cent this year, compared with a 34 per cent gain in the benchmark Kospi index. LG Energy’s shares have dropped 1.4 per cent in the same period.
On Sept 7, a group of South Korean ruling party lawmakers said if the US really wants to win investment from South Korean businesses, large-scale detention of its citizens should not have happened.
Before South Korean firms expand US investments, Seoul must press Washington to guarantee the safety of citizens and improve visa policies for those visiting the US for investment purposes, they said.
The Maeil Business Newspaper ran a cartoon showing Mr Trump wielding a club, while a figure delivers a box of money to fund US factories – only to be bewildered as dozens of South Korean employees on US business trips are detained.
The Georgia plant was a tangible symbol of Seoul’s commitment to boosting US manufacturing.
South Korean businesses will face more challenges in constructing new plants or operating in the US if the American authorities continue to enforce stringent immigration laws without fixing persistent visa problems, said Mr Chang Sang-sik, head of the Korea International Trade Association’s International Trade and Commerce Research Centre.
Local media reports said many South Korean companies have resorted to the visa waiver programme known as ESTA, intended for short-term business trips up to 90 days, when they have to dispatch employees immediately.
“The US is demanding investments from South Korea but is asking us to use Americans only to construct factories there. In reality, that is just impossible,” Mr Chang said. “They need local technicians during the construction period.”
US officials described it as the Homeland Security Department’s largest single-site enforcement action, detaining 475 workers in total.
While they maintained the raid was the result of a months-long investigation into illegal hiring and was not politically motivated, the optics are undeniable.
The incident pits a core tenet of the Trump administration’s policy of aggressive immigration enforcement
South Korea is the US’s sixth-largest trading partner and its companies are integral players in the global EV battery supply chain.
Their investments in US factories were explicitly encouraged by Washington to reduce dependence on China. A crackdown that sweeps up such projects risks potentially complicating trading relations.
The raid has already sparked immediate reactions.
The construction on the Georgia plant has been temporarily paused, a halt that could have ripple effects on the timeline for Hyundai’s broader EV production plans in the US.
The Georgia industrial site is designed to produce as many as 500,000 hybrid and electric vehicles a year and employ up to 12,500 workers by early next decade.
It’s not the first time Hyundai – which has become one of the most prominent foreign investors in US manufacturing – has been entangled in US legal problems related to employment issues.
In 2022, the US Labour Department found child labour violations at companies supplying the Korean automaker in Alabama.
Hyundai has said that it’s closely monitoring the situation in Georgia and working to understand the specific circumstances, and none of its employees were among the detained.
LG Energy said it was suspending business travel for employees to the US and advised its staff already there to return home. LG said 47 of its employees were among those held – 46 from South Korea and one Indonesian. Other South Koreans detained were subcontractors, reports say. BLOOMBERG
