BREAKINGVIEWS-Hyundai raid sets Trump goals against each other

By Robyn Mak

HONG KONG, Sept 10 (Reuters Breakingviews) - When two objects collide, they exert equal and opposite forces on each other. The same may be true for U.S. President Donald Trump's increasingly conflicting goals of curbing immigration and bringing back high-tech manufacturing.

Last week's high-profile raid at a Hyundai 005380.KS car battery facility in Georgia is the largest single-site enforcement in the history of the U.S. Department of Homeland Security's investigative operations. Nearly 500 workers were arrested and detained. The incident and accompanying shocking visuals of hundreds of mostly South Korean workers shackled in chains quickly sparked a diplomatic crisis, testing already fragile bilateral relations between the two trading partners and security allies, not to mention a surge of anti-American sentiment in South Korea.

U.S. officials defended the operation, the result of a months-long investigation, saying many of those arrested had temporary visas for tourism and business travel and were therefore not authorised to work. That may be true. But for years South Korean firms have relied on this practice, which at best was a legally questionable interpretation of the rules, because of how hard it is to get the required visas for skilled workers, according to an investigation by Reuters. There were similar arrests, albeit on a much smaller scale, back in 2020 at a battery plant owned by South Korea's SK On.

The fallout should be manageable for now. The detained workers are set to return to South Korea, where officials are lobbying Washington to make it easier for businesses to bring in skilled talent, such as by creating a new visa category. For Hyundai and its partner LG Energy Solution 373220.KS, their $4.3 billion battery venture will probably face delays and added compliance costs. But it will take far more to force South Korean firms to shun the U.S., where Seoul has agreed to set up a $350 billion investment fund as part of a trade deal announced in July. Hyundai, for instance, counts the United States as one of its top markets and is already one of the country's biggest investors there; last month, it hiked up its three-year spending plan stateside to $26 billion.

The bigger problem, however, is that foreign manufacturers like Hyundai will have to keep bringing in overseas experts to get American factories up and running – a reality that goes against Washington's increasingly hard stance against immigration. That's largely due to a manufacturing skills gap in the United States with Asian powerhouses like South Korea, Taiwan and China. The People's Republic, for instance, boasts an unrivalled expertise in what author and China analyst Dan Wang calls"process knowledge", or industrial expertise.

This tension will probably increase over time. The $1 trillion Taiwan Semiconductor Manufacturing 2330.TW, for instance, has been hitwith a civil class action lawsuit from former and current employees accusing the chipmaker of discrimination and racism, among other things, against non-American workers at its Arizona factories. Between two of Trump's signature policy priorities, something will have to give.

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CONTEXT NEWS

South Korean workers detained in an immigration raid on September 4 in the U.S. state of Georgia will leave the U.S. around 1430 local time (1830 GMT) on September 10, Yonhap news agency reported, citing an unidentified diplomatic source.

U.S. immigration authorities on September 5 said they arrested 475 workers at a Hyundai car battery facility – the largest single-site enforcement in the history of the Department of Homeland Security's investigative operations. Many of those arrested had temporary visas for tourism and business travel that are not authorised for work, including South Korean nationals, an official told Reuters.

LG Energy Solution is working with Hyundai to build the factory.

"LG Energy Solution has been actively working to resolve visa issues" for its employees and subcontractors, including holding visa briefing sessions through law firms to "prevent legal issues," LGES said in a statement when asked by Reuters about its employees' visas.

In response to Reuters' questions about the allegations of immigration violations by subcontractors at the site, Hyundai Motor referred to a statement that said it has "zero tolerance for those who don’t follow the law" and would investigate the employment practices of suppliers and their subcontractors.