SEOUL — The immigration raid that snatched up hundreds of South Koreans last week sent a disconcerting message to companies in South Korea and elsewhere: America wants your investment, but don’t expect special treatment.
Images of employees being shackled and detained like criminals have outraged many South Koreans. The fallout is already being felt in delays to some big investment projects, auto industry executives and analysts said. Some predicted that it could also make some companies think twice about investing in the U.S. at all.
“Companies cannot afford to not be more cautious about investing in the U.S. in the future,” said Lee Ho-guen, an auto industry expert at Daeduk University, “In the long run, especially if things get worse, this could make car companies turn away from the U.S. market and more toward other places like Latin America, Europe or the Middle East.”
The raid last week, in which more than 300 South Korean nationals were detained, targeted a factory site in Ellabell, Ga., owned by HL-GA Battery Co., a joint venture between Hyundai and South Korean battery maker LG Energy Solutions to supply batteries for electric vehicles. The Georgia factory also is expected to supply batteries for Kia, which is part of the Hyundai Motor Group. Kia has spent hundreds of millions of dollars on its factory in West Point, Ga.
“This situation highlights the competing policy priorities of the Trump administration and has many in Asia scratching their heads, asking, ‘Which is more important to America? Immigration raids or attracting high-quality foreign investment?’” said Tami Overby, former president of the American Chamber of Commerce in Korea. “Images of hundreds of Korean workers being treated like criminals are playing all over Asia and don’t match President Trump’s vision to bring high-quality, advanced manufacturing back to America.”
A protester wears a mask of President Trump at a rally Tuesday in Seoul against the detention of South Korean workers in Georgia. The signs call for “immediate releases and Trump apology.”
(Ahn Young-joon / Associated Press)
South Korea is one of the U.S.’ biggest trading partners, with the two countries exchanging $242.5 billion in goods and services last year. The U.S. is the leading destination for South Korea’s overseas investments, receiving $26 billion last year, according to South Korea’s Finance Ministry.
Trump is banking on ambitious projects like the one raided in Georgia to revive American manufacturing.
Hyundai is one of the South Korean companies with the largest commitments to the U.S. It has invested about $20 billion since entering the market in the 1980s. It sold 836,802 vehicles in the U.S. last year.
California is one of its largest markets, with more than 70 dealerships.
Earlier this year, the company announced an additional $26 billion to build a new steel mill in Louisiana and upgrade its existing auto plants.
Hyundai’s expansion plans were part of the $150-billion pledge that South Korea made last month to help persuade Trump to set tariffs on Korean products at 15% instead of the 25% he had earlier announced.
Samsung Electronics announced that it would invest $37 billion to construct a semiconductor factory in Texas. Similarly large sums are expected from South Korean shipbuilders.
Analysts and executives say the recent raid is making companies feel exposed, all the more so because U.S. officials have indicated that more crackdowns are coming.
“We’re going to do more worksite enforcement operations,” White House border advisor Tom Homan said Sunday. “No one hires an illegal alien out of the goodness of their heart. They hire them because they can work them harder, pay them less, undercut the competition that hires U.S. citizen employees.”
Many South Korean companies have banned all work-related travel to the U.S. or are recalling personnel already there, according to local media reports. Construction work on at least 22 U.S. factory sites has reportedly been halted.
The newspaper Korea Economic Daily reported Monday that 10 out of the 14 companies it contacted said they were considering adjusting their projects in the U.S. due to the Georgia raid.
It is a significant problem for the big planned projects, analysts say. South Korean companies involved in U.S. manufacturing projects say they need to bring their own engineering teams to get the factories up and running, but obtaining proper work visas for them is difficult and time-consuming. The option often used to get around this problem is an illegal shortcut like using the Electronic System for Travel Authorization, or ESTA, a nonwork permit that allows tourists to stay in the country for up to 90 days.
Unlike countries such as Singapore or Mexico, South Korea doesn’t have a deal with Washington that guarantees work visas for specialized workers.
“The U.S. keeps calling for more investments into the country. But no matter how many people we end up hiring locally later, there is no way around bringing in South Korean experts to get things off the ground,” said a manager at a subcontractor for LG Energy Solution who asked not to be named. “But now we can no longer use ESTAs like we did in the past.”
Trump pointed to the problem on his social media platform, posting that he will try to make it easier for South Korean companies to bring in the people they need, but reminding them to “please respect our Nation’s Immigration Laws.”
“Your Investments are welcome, and we encourage you to LEGALLY bring your very smart people … and we will make it quickly and legally possible for you to do so,” the post said.
Sydney Seiler, senior advisor and Korea chair at the Washington-based Center for Strategic and International Studies, said that the timing of the raids was an “irritant” but that South Korean companies eventually would adjust.
“Rectifying that is a challenge for all involved, the companies, the embassies who issue visas, etc.,” Seiler said, adding that the raids will make other companies be more careful in the future.
Source link