The Trump Administration’s aggressive immigration crackdown could be bad for business, experts tell TIME.
Immigration and Customs Enforcement agents arrested 475 people on Thursday in Ellabell, Ga., in what U.S. officials said is the largest single-site immigration raid. More than 300 of those detained were South Korean nationals working at the factory, which is co-owned by South Korean battery maker LG Energy Solution and auto company Hyundai. South Korean Presidential Chief of Staff Kang Hoon-sik said on Sunday that the Trump Administration has agreed to release the Korean nationals who could return home on a chartered flight as soon as Wednesday.
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Responding to the incident, President Donald Trump seemed eager to strike a balance between the seemingly competing interests of attracting foreign investors while driving out undocumented immigrants.
“I am hereby calling on all Foreign Companies investing in the United States to please respect our Nation’s Immigration Laws. Your Investments are welcome, and we encourage you to LEGALLY bring your very smart people, with great technical talent, to build World Class products, and we will make it quickly and legally possible for you to do so,” Trump posted on Truth Social on Sunday evening. “What we ask in return is that you hire and train American Workers. Together, we will all work hard to make our Nation not only productive, but closer in unity than ever before.”
But experts say that the raid could already be costing the U.S. foreign investment.
“It certainly has dampened the investment sentiments and raised concerns among Korean firms on how to approach direct investment in the USA,” Ryu Yongwook, an assistant professor at the Lee Kuan Yew School of Public Policy in Singapore specializing in East Asian international relations, tells TIME.
The detentions have inflamed tensions between the American and Korean governments, especially as the raid came less than two weeks after South Korean firms pledged to invest billions of dollars in the U.S. as part of a U.S.-South Korea trade deal. South Korean lawmaker Oh Gi-hyoung said at a news conference on Sunday that if the U.S. expects to attract investment from South Korean companies, it should treat South Korean nationals with respect.
The U.S. accounts for the largest share of South Korea’s investments abroad, according to the country’s Finance Ministry.
“The Trump Administration is asking South Korea to do more for the USA, especially in inculcating U.S. manufacturing, and it simultaneously cracks down on Korean firms that are making major investments in the USA,” Ryu says. “It makes little sense and hurts U.S. interests.”
Georgia plant construction delayed
The battery plant where the ICE raid took place last week is part of a gigafactory complex spread out across nearly 3,000 acres that is expected to produce thousands of jobs once completed. Georgia has been at the core of the U.S.’s green energy boom in recent years, as overseas firms have rushed to take advantage of Biden-era government subsidies. Last week, Gov. Brian Kemp, a Republican who has pushed for foreign green energy investments, announced that another Korean firm, biotechnology company JS Link, would build a magnet manufacturing facility in the state, creating over 500 new jobs.
Across the country, some of Korea’s biggest companies have invested in huge projects propped up by federal subsidies as part of former President Joe Biden’s 2022 Inflation Reduction Act, which has largely benefited red states even as Republican lawmakers and the Trump Administration have sought to repeal or undermine parts of it. Last month, Hyundai committed to increase its direct investment in the U.S. from $21 billion to $26 billion by 2028, while South Korea announced a $150 billion project to aid the U.S.’s shipbuilding industry as part of a broader $350 billion investment package.
The raid, though, will likely slow down the timeline for the plant to be completed—and for Hyundai to ramp up U.S. manufacturing more broadly. Construction has been temporarily suspended and will likely be delayed further in order to hire new staff. LG Energy said it was halting business travel for its employees to the U.S. and advised its employees in the U.S. to return to South Korea. The company said that 47 of its employees had been detained, 46 of whom are South Korean, while Hyundai said none of its employees were among those detained but that it is vetting the employment practices of its suppliers and subcontractors.
The delay “will have a detrimental effect to the local economy in Georgia,” Ryu says.
Barry Zeigler, the business manager of UA Local Union 188, which represents plumbers, pipe-fitters, welders, and air-conditioning technicians, told the New York Times that the plant was meant to create jobs for locals, but dozens of union members had been let go earlier this month. Trump has, as recently as Sunday, called on foreign companies to employ more Americans.
But some say there aren’t enough Americans who can fulfill those jobs, at least without adding to operational costs or requiring more time. “The reality is right now that there’s a work force shortage for construction labor pretty much nationally,” Didi Caldwell, the chief executive of Global Location Strategies, told the Times.
“The U.S. is demanding investments from South Korea but is asking us to use Americans only to construct factories there. In reality, that is just impossible,” Chang Sang-sik, head of the Korea International Trade Association’s International Trade and Commerce Research Center, told Bloomberg. “They need local technicians during the construction period.”
Aggressive immigration policies clash with goal for foreign investment
The demand for construction workers has clashed with the Trump Administration’s crackdown on both legal and illegal immigration. Georgia state officials have embraced the Trump Administration’s aggressive immigration priorities. The U.S. Attorney’s office in the Southern District of Georgia said the raid was part of “Operation Take Back America,” a nationwide campaign to “repel the invasion of illegal immigration.”
“In Georgia, we will always enforce the law, including all state and federal immigration laws,” Kemp’s office said in a statement. “All companies operating within the state must follow the laws of Georgia and our nation.”
But the detentions have already spooked foreign investors.
“Talking to my friends last night, I had one guy say, ‘We’re getting mixed messages from the Administration: You want our money, but you don’t want us,’” Tami Overby, an international business consultant who formerly led the U.S.-Korea Business Council at the U.S. Chamber of Commerce, told the Times. “It had a chilling impact all across board rooms in Asia.”
The Trump Administration has also tightened legal avenues to work in the U.S., including introducing stricter rules for H-1B visas.
“In principle, Korean companies have violated the U.S. immigration law, so they don’t have reason to complain,” Ryu says, but he notes that the application process for H-1B is almost prohibitively time-consuming and costly.
“South Korean companies are reluctant to go that route because it takes at least 8 months of lead time before you can begin working on an H-1B, and there is no guarantee you will get it,” Chun Jong-joon, a Korean American immigration lawyer, told the Los Angeles Times. There are also quotas set per country for H-1B visas, and the visa is awarded by an annual lottery.
What some Korean companies end up doing instead is using 90-day tourist visa waivers, which do not allow for work, to bring Korean nationals into the U.S. for up to three months and rotate them until construction is completed, Ryu says. It was a “known practice,” he adds, claiming that the U.S. generally “didn’t pay much attention,” since American workers and the U.S. economy ultimately benefitted from the speedy construction of these projects.
Since Korean firms have committed to increase their direct investments in the U.S., the U.S. government should in turn raise the H-1B quota for South Koreans and improve the process to legally work in the U.S., Ryu says.
Unless the U.S. fixes its persistent visa issues, Ryu says the Trump Administration’s immigration policies will make the country unfriendly for business. It’s a clash in interests he’s seen happen elsewhere—with Trump’s tariffs.
“The U.S. is now losing competitiveness in chip fabrication, especially in the foundry,” Ryu says. “Given how strategic and critical chips are, especially in the context of the U.S.-China strategic rivalry, the U.S. needs its allies such as South Korea, Taiwan, and Japan, to assist the U.S. in this regard. And yet, Trump has threatened these allies with chip tariffs and even contemplated taking a partial ownership of foreign fabrication firms.”
The plant “benefited the local economy in Georgia, as the speedy construction of the Hyundai factory would expedite the hiring of locals once the factory is constructed,” Ryu says. The reaction in South Korea has been that the “heavy-handed arrest … was unnecessary and unreasonable,” he adds.
“Trump’s immigration policies and push for bigger foreign investment do not have to be incompatible,” says Ryu. “But for them not to be incompatible, the U.S. government must produce and apply a fine-tuned immigration policy that eases the process of foreign direct investment.”