South Korea should turn the U.S. ICE raid into trade leverage

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 Trump administration is trying to re-industrialize America, 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 and LG Energy Solution factory outside Savannah — the biggest-ever Homeland Security enforcement action at a single location — U.S. officials sought to justify the operation by saying the 300 South Koreans arrested were working illegally. But that logic now appears to be on shaky ground.

U.S. 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 U.S. agreed that visitors bearing the B-1 visa or arriving with an ESTA visa waiver are permitted to install, service and repair imported equipment related to investment projects.

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 LGES, the primary operator of the facility, to resume sending specialist workers to Georgia after the autumn harvest holiday this week.

As I’ve written before, there is no doubt Korea Inc. is eager to move on from the unpleasantries and return to business as usual in its biggest and most profitable market, where tens of billions of dollars in investment have already been committed. But that doesn’t mean it should.

It’s precisely because of the primacy of the U.S. that Asian economies such as South Korea, Japan and Taiwan 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 U.S. investor conference in New York, held just days following the ICE raid, the carmaker touted North America as its "powerhouse” of growth. It plans to double U.S. vehicle production from the current 40% of domestic sales to 80% by 2030 in response to U.S. President Donald Trump’s tariff policies. But without a finalized trade agreement, Hyundai and fellow Korean firms are being hammered by 25% import tariffs, compared to 15% 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 $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 in order to avoid unnecessary shocks to the economy.

The raid on the Hyundai-LG factory showed that real people can be hurt when countries are pressured to follow the U.S. agenda. It doesn’t serve South Korea to put more than 80% of its foreign reserves, as Washington is demanding, into one basket without guarantees like a currency swap to minimize volatility.

Seoul isn’t the only Asian capital pushing back. Sanae Takaichi, likely to be Japan’s first female prime minister after winning leadership of the Liberal Democratic Party, earlier said the country "must stand our ground” if anything unfair comes to light in the process of implementing its own $550 billion deal. She has since signaled an intention to honor the deal.

Taipei, too, is drawing red lines. In March, President Lai Ching-te reassured the public when chipmaker Taiwan Semiconductor Manufacturing Co. announced an additional $100 billion in U.S. investment. Last week, Vice Premier Cheng Li-chiun said the island would resist any pressure to move half of its chip output there, an idea floated by Secretary of Commerce Howard Lutnick in an interview.

It’s heartening to see governments finally standing up to Washington, in contrast to the deference previously shown to the Trump administration. Perhaps we’re in the second phase of global reaction, where bending the knee doesn’t always make business sense. That was the case for Walt Disney, when it canceled and then reinstated late-night comedian Jimmy Kimmel, and should be the strategy for Asian countries now.