Yasmin Ayman

Over the past few years, South Korea has sought to reinforce its relationship with the U.S. through joint industrial investments in specific sectors. Large-scale projects are underway in multiple U.S. states, focusing mainly on electric vehicle battery manufacturing. However, recent events have exposed the fragility of such a partnership. On September 4, 2025, federal immigration authorities and Homeland Security agencies conducted <a href="https://www.nytimes.com/2025/09/06/us/immigration-raid-georgia.html" rel="noopener noreferrer" target="_blank">a raid</a> at the construction site of a battery factory jointly operated by Hyundai and LG in Bryan County, Georgia. Approximately <a href="https://aawsat.com/%D8%A7%D9%84%D8%B9%D8%A7%D9%84%D9%85/%D8%A2%D8%B3%D9%8A%D8%A7/5183242-%D8%A3%D9%85%D9%8A%D8%B1%D9%83%D8%A7-%D8%AA%D9%88%D9%82%D9%8A%D9%81-%D9%85%D8%A6%D8%A7%D8%AA-%D8%A7%D9%84%D9%83%D9%88%D8%B1%D9%8A%D9%8A%D9%86-%D8%A7%D9%84%D8%AC%D9%86%D9%88%D8%A8%D9%8A%D9%8A%D9%86-%D8%AE%D9%84%D8%A7%D9%84-%D9%85%D8%AF%D8%A7%D9%87%D9%85%D8%A9-%D9%85%D8%B5%D9%86%D8%B9-%D9%84%D9%80%D9%87%D9%8A%D9%88%D9%86%D8%AF%D8%A7%D9%8A-%D9%81%D9%8A-%D8%AC%D9%88%D8%B1%D8%AC%D9%8A%D8%A7" rel="noopener noreferrer" target="_blank">475</a> workers were detained, including more than 300 South Korean nationals holding valid work visas. The detentions were prompted by allegations that their work violated the terms of their visas. The workers were later released and eventually repatriated to Seoul. The incident ignited a widespread debate over the interpretation of immigration laws in such circumstances and raised serious concerns about the viability of South Korea’s economic partnership with Washington.Crisis Implications The immigration and visa policies implemented by Trump’s administration are expected to have several ramifications for U.S.–South Korea relations, as follows:1- Undermining the Trade Deal Between Washington and Seoul: In July 2025, the U.S. and South Korea finalized a trade agreement that included reducing tariffs on Korean automobiles from 25% to 15% and lowering mutual tariffs to 15%, down from the 25% initially imposed by the Trump administration. The deal also included Seoul’s commitment to invest up to <a href="https://www.nytimes.com/2025/09/06/us/immigration-raid-georgia.html" rel="noopener noreferrer" target="_blank">$350</a> billion in diverse sectors, including technology. However, the recent raid has cast a shadow over these planned investments. South Korean President Lee Jae-Myung warned that these raids would have lasting effects on future investments, stressing that Korean companies may become reluctant to inject further capital into the U.S. market. Amid growing domestic backlash, <a href="https://www.dw.com/en/south-korea-says-immigration-raid-could-impact-us-investment/a-73956067" rel="noopener noreferrer" target="_blank">South Korean</a> Foreign Minister Cho Hyun traveled to Washington to discuss adjustments to the U.S. visa framework for foreign investors and workers.2- Rising Apprehension Over U.S. Investments: South Korea is a crucial trade partner for the U.S. and was expected to play a key role in Trump’s efforts to attract more foreign investment and create jobs. However, increasingly restrictive visa policies and unexpected raids on strategic sites, such as the Georgia battery plant, have created uncertainty among Korean investors. The joint Hyundai–LG Energy Solution plant was a critical project yet inconsistent enforcement practices have made long-term planning challenging. U.S. officials claimed the raid was justified by suspicions of <a href="https://www.nytimes.com/2025/09/06/us/immigration-raid-georgia.html" rel="noopener noreferrer" target="_blank">unauthorized labor</a> and improper use of corporate benefits. In October 2025, a new <a href="https://www.nytimes.com/2025/10/01/world/asia/south-korea-georgia-factory-visa.html" rel="noopener noreferrer" target="_blank">agreement</a> was reached allowing South Korean workers to contribute to factory construction in the U.S. under a special visa exemption program. Short-term B-1 visas will also be issued, and a dedicated visa office will be established at the U.S. Embassy in Seoul to facilitate engineering personnel transfers.3- Intensified Negotiations to Secure Mutual Benefits: While the situation has not escalated into an open diplomatic crisis, it has led to a flurry of negotiations. South Korea’s top trade negotiator remained in Washington to continue discussions over the $350 billion investment plan. Additionally, meetings took place between U.S. Commerce Secretary Howard Lutnick and South Korean Industry Minister Kim Jung-kwan, as well as between Korean Trade Minister Yeo Han-koo and U.S. Trade Representative Jamieson Greer. Talks focused on reducing tariffs on Korean cars and spare parts, which still exceed those imposed on Japanese imports. Notably, President Trump has yet to sign the executive order reducing tariffs to 15%. While Seoul is pushing for a resolution, Washington is pressuring Korea to raise its investment commitment to $550 billion—matching Japan’s pledge. Seoul, however, views this demand as unrealistic given the disparity in the <a href="https://www.bloomberg.com/news/articles/2025-09-17/korea-us-trade-talks-remain-in-deadlock-after-raid-fuels-tension" rel="noopener noreferrer" target="_blank">two nations' economic scales</a>. There are signs that Korea may accept higher tariffs (25%) rather than commit to an investment figure that would negatively impact its GDP. As of <a href="https://www.reuters.com/world/asia-pacific/south-korea-foreign-minister-says-rough-agreement-security-reached-with-us-2025-10-01/" rel="noopener noreferrer" target="_blank">October 2025,</a> no detailed trade agreement had been finalized, and the negotiations are expected to be protracted.4- Growing Anti-U.S. Sentiment in South Korea: Trump’s immigration policies and rhetoric toward South Korea and other countries have fueled growing public resentment. This shift in sentiment is already impacting investment strategies of major Korean conglomerates. For instance, Hyundai has <a href="https://www.washingtonpost.com/world/2025/09/08/south-korea-us-immigration-raid-tensions/" rel="noopener noreferrer" target="_blank">invested</a> approximately $20.5 billion in the U.S. and planned an additional $21 billion investment between 2025 and 2028, relying on tax incentives granted under President Biden’s CHIPS and Science Act to bolster the semiconductor industry. However, Trump’s policies—particularly new tariffs—have cost Hyundai <a href="https://www.washingtonpost.com/world/2025/09/08/south-korea-us-immigration-raid-tensions/" rel="noopener noreferrer" target="_blank">over $600 million</a> in Q2 2025 alone, undermining its future investment prospects. Worker and engineer <a href="https://thediplomat.com/2025/09/the-hyundai-raid-reflects-a-broken-us-immigration-system/" rel="noopener noreferrer" target="_blank">deployments</a> to the U.S. are also under scrutiny following the harsh treatment of Korean personnel during the raid.5- Strained Ties with a Key Indo-Pacific Ally: Under a bilateral defense treaty, South Korea hosts one of the <a href="https://www.alarabiya.net/arab-and-world/2018/06/29/%D8%A3%D9%85%D9%8A%D8%B1%D9%83%D8%A7-%D8%AA%D8%AF%D8%B4%D9%86-%D8%A3%D9%83%D8%A8%D8%B1-%D9%82%D8%A7%D8%B9%D8%AF%D8%A9-%D8%B9%D8%B3%D9%83%D8%B1%D9%8A%D8%A9-%D9%81%D9%8A-%D8%A7%D9%84%D8%AE%D8%A7%D8%B1%D8%AC-%D8%A8%D9%83%D9%88%D8%B1%D9%8A%D8%A7-%D8%A7%D9%84%D8%AC%D9%86%D9%88%D8%A8%D9%8A%D8%A9" rel="noopener noreferrer" target="_blank">largest</a> overseas U.S. military bases, with approximately 28,500 American troops stationed in the country. The base is considered a critical safeguard against North Korea’s nuclear threat. Yet, recent U.S. policies are pushing Seoul to consider diversifying its international alliances, potentially weakening America’s influence in the Indo-Pacific at a time when it views China as its primary strategic rival.6- Hindering U.S. Semiconductor Ambitions: Since President Biden’s term, the U.S. has prioritized technological leadership in <a href="https://thediplomat.com/2025/09/the-hyundai-raid-reflects-a-broken-us-immigration-system/" rel="noopener noreferrer" target="_blank">semiconductors</a>, committing $52 billion to reduce reliance on Asian supply chains and outpace China, which currently dominates 77% of the global battery market. However, Trump’s immigration policies are obstructing vital collaboration with South Korea in this strategic sector. Delays in processing work visas— ranging between six to eighteen months—are forcing companies to seek less ideal alternatives. Consequently, this undermines America’s competitive advantage in advanced manufacturing.Temporary ContainmentIn conclusion, Trump’s hardline immigration stance is at odds with his domestic economic ambitions. It also undermines the traditional image of the United States as a land of opportunity for immigrants and global talent. Although South Korea is unlikely to sever its strategic partnership with Washington in the near term, due to the critical importance of the U.S. market for Korean technology exports, it is expected to adopt a strategy of temporary containment in dealing with the Trump administration, at least until the conclusion of his term. In the long term, investment decisions will be shaped by growing concerns over unstable immigration regulations and their direct impact on foreign investors, especially as Trump continues his push to weaken federal institutions and sideline officials who oppose his agenda.

How Trump’s Immigration Policies Undermine U.S.–Korea Ties