The immigration raid at a South Korean-owned electric battery plant in Georgia last month shocked the world with its overreach. At a time when the administration of US President Donald Trump is trying to reindustrialize the US, why humiliate hundreds of business travelers? As the injured party, Seoul ought to capitalize on the widespread public outcry to strike the best trade deal it can with Washington.
In the aftermath of the Sept. 4 crackdown on the jointly owned Hyundai Motor Co and LG Energy Solution Ltd factory outside Savannah — the biggest-ever US Department of Homeland Security enforcement action at a single location — US officials sought to justify the operation by saying that the 300 South Koreans arrested were working illegally, but that logic now appears to be on shaky ground.
US Deputy Secretary of State Christopher Landau expressed “deep regret” about the case during a visit to Seoul following the return of the detainees and last week, an inaugural meeting in Washington between the two sides to thrash out a solution on working visas ended up affirming that South Koreans on short-term permits had every right to be doing the kind of work they were brought in to do. The US agreed that visitors bearing the B-1 visa or arriving with an Electronic System for Travel Authorization visa waiver are permitted to install, service and repair imported equipment related to investment projects.
Illustration: Mountain People
No immediate progress was made on Seoul’s efforts to establish a more formal visa category for temporary employees, which workers in Australia and Singapore enjoy. That would require Congressional approval. Still, the assurances were enough to enable LG Energy, the primary operator of the facility, to resume sending specialist workers to Georgia after the autumn holiday, which ends later this week.
As I have written before, there is no doubt that South Korean companies are eager to move on from the unpleasantries and return to business as usual in their biggest and most profitable market, where tens of billions of dollars in investment have already been committed, but that does not mean that they should.
It is precisely because of the primacy of the US that Asian economies such as Taiwan, South Korea and Japan should make a stand now and draw a proverbial line in the sand regarding how they engage with Washington on trade.
For example, during Hyundai’s first-ever US investor conference in New York, held just days following the US Immigration and Customs Enforcement (ICE) raid, the automaker touted North America as its “powerhouse” of growth. It plans to double US vehicle production from the current 40 percent of domestic sales to 80 percent by 2030 in response to Trump’s tariff policies. However, without a finalized trade agreement, Hyundai and fellow South Korean firms are being hammered by 25 percent import tariffs, compared with 15 percent for their Japanese and European rivals whose governments have already sealed a deal.
South Korean officials should take advantage of whatever contrition the White House has demonstrated following the crackdown to negotiate more favorable terms. Seoul has objected to Washington’s demand that the US$350 billion investment package agreed in principle over the summer, a key part of any final deal, be made primarily in cash. It wants the agreement to be structured mainly as loans or loan guarantees to avoid unnecessary shocks to the economy.
The raid on the Hyundai-LG Energy factory showed that real people can be hurt when nations are pressured to follow the US agenda. It does not serve South Korea to put more than 80 percent of its foreign reserves, as Washington is demanding, into one basket without guarantees such as a currency swap to minimize volatility.
Seoul is not the only Asian capital pushing back. Sanae Takaichi, set to be Japan’s first female prime minister after winning leadership of the Liberal Democratic Party, has said her nation “must stand our ground” if anything unfair comes to light in the process of implementing its own US$550 billion deal. She has since signaled an intention to honor the deal.
Taiwan, too, is drawing red lines. President William Lai (賴清德) in March reassured the public when chipmaker Taiwan Semiconductor Manufacturing Co announced an additional US$100 billion in US investment. Vice Premier Cheng Li-chiun (鄭麗君) last week said that the nation would resist any pressure to move half of its chip manufacturing to the US, an idea floated by US Secretary of Commerce Howard Lutnick in an interview.
It is heartening to see governments finally standing up to Washington, in contrast to the deference previously shown to the Trump administration. Perhaps we are in the second phase of global reaction, where bending the knee does not always make business sense. That was the case for Walt Disney Co, when it canceled and then reinstated late-night comedian Jimmy Kimmel, and should be the strategy for Asian nations now.
Juliana Liu is a columnist for Bloomberg Opinion’s Asia team, covering corporate strategy and management in the region. She was previously CNN’s senior business editor for Asia, and a correspondent at BBC News and Reuters. This column reflects the personal views of the author and does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
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