Hyundai battery facility raid raises new concerns for foreign investors

An immigration raid at a Georgia battery plant is raising questions for foreign investors as US President Donald Trump seeks funding commitments from trading partners to boost domestic manufacturing, experts said.

US Immigration and Customs Enforcement led a multi-agency raid detaining nearly 500 individuals on Sept. 4 at the construction site of Hyundai Motor Company's supplier, the HL-GA Battery Company, a Hyundai and LG Energy Solution company. Officials described it as the largest single-site raid in US history. Around 300 of the individuals were South Korean nationals.

The raid exposed contradictions between the Trump administration's hardline immigration policies and its desire to attract foreign investment to the US. Experts said the administration needs to clear pathways for skilled workers to come to the US to train domestic employees, which could throw up hurdles to a trade deal the US and South Korea are negotiating.

"Foreign investors feel they're getting mixed signals. On the one hand, there's been strong signals of encouragement... to invest in the United States," Matt Goodman, distinguished fellow for geoeconomic studies at the Council on Foreign Relations, told Platts, part of S&P Global Commodity Insights. "On the other hand, there's been enhanced scrutiny of foreign investment."

Uncertainty surrounds US investment

The raid comes after Trump announced a trade pact with the US and Korea on July 30, although the details of the deal are not finalized. The framework lowered tariffs for the country to 15% and included $350 billion in investments for shipbuilding, LNG and other energy products. Trump has also structured deals around $600 billion in investments from the EU, $550 billion from Japan and he has said he expects to negotiate more agreements along those lines.

But foreign investors, who were already focused on the uncertainty surrounding Trump's tariffs, are more concerned about the environment for investing in the US following the incident in Georgia, Goodman said.

"There's a concern about how welcome they are here and how much at risk they are if they invest in anything that could be deemed as somehow sensitive to national security, with the term national security being interpreted pretty broadly," Goodman said.

The situation in Georgia may lead foreign leaders and company executives to question their own investment plans.

"I once again emphasized the President's words that the economic activities of our companies investing in the U.S. and the rights and interests of our nationals must not be unjustly infringed upon in the course of U.S. law enforcement," South Korean Foreign Minister Cho Hyun wrote in a Sept. 6 post on X after the Georgia raid.

South Korea-based Hyundai invested $12.6 billion in Georgia to produce 500,000 electric and hybrid vehicles at the vehicle assembly and battery plant, the largest economic development project in Georgia's history.

The facility opened in March 2025 as part of a joint battery venture with LG Energy Solution and SK On and is expected to create 8,500 jobs by 2031.

LG Energy Solution said in a statement to Platts the company is making "all-out efforts" to release the 47 of its employees who were detained in the raid. The company also suspended all US business trips except for customer meetings, conferences and exhibitions.

"We will do our utmost to swiftly resolve the issue and ensure the safe and prompt return of our employees and partner company members," LG Energy Solution said.

Hyundai also committed an additional $21 billion investment from 2025 to 2028 to drive US manufacturing growth, according to the company's website. The carmaker said in a statement that none of the detained individuals are directly employed by Hyundai Motor Company.

"Hyundai is committed to full compliance with all laws and regulations in every market where we operate," the company said. "This includes employment verification requirements and immigration laws. We expect the same commitment from all our partners, suppliers, contractors, and subcontractors."

Lawful immigration pathways needed

Foreign companies may argue that they are short of skilled workers in the US and need to bring key individuals until others are trained, Syd Seiler, Korea Chair at the Center for Strategic and International Studies, told Platts.

"If this is going to be the model and countries are going to be urged to invest in the United States and this is about hiring locals... that's fair. But it also can't be done without some type of better system in place to allow for the type of skilled workers and management that a company like Hyundai, Samsung or whoever's investing here would need to bring in," Seiler said.

The raid exposes a contradiction in the Trump administration's goal to restore US manufacturing, Arius Derr, the communications director at the Korea Economic Institute of America, wrote on Sept. 8.

"The Trump administration must square the circle by expanding lawful pathways by which foreign workers can support the investments the administration wishes to attract, or it will shut down a major pipeline through which good, new American jobs are being created," he wrote.

Derr argued that immigration rules and visa restrictions limit companies from hiring short-term, firm-specific technicians needed to stand up plants in the US.

"In other words, the United States wants FDI (foreign direct investment) and the high-tech manufacturing that comes with it, yet offers few legally safe pathways for short-term deployment of proprietary, factory-specific expertise," he wrote.

Trump called on all foreign companies investing in the US to "please respect" immigration laws.

"Your investments are welcome, and we encourage you to LEGALLY bring your very smart people, with great technical talent, to build World Class products, and we will make it quickly and legally possible for you to do so. What we ask in return is that you hire and train American Workers," Trump wrote in a Sept. 7 Truth Social post.

Raid jolts negotiations

Goodman said the situation in Georgia created "a real diplomatic jolt" to the relationship between the US and Korea following the Trump administration's newly implemented tariffs, despite the country negotiating a free trade agreement that went into effect in 2012.

As part of trade negotiations, the 25% tariffs on automobile parts imported to the US from Korea remains. Hyundai executives said on a July 24 earnings call the tariffs cost the company more than $600 million.

Goodman thinks South Korean officials may seek more assurance and certainty around planned investments following the Georgia incident in final trade deal discussions. Seiler said this trend may be seen for trade deals that include investment components with other countries.

"I think the Koreans are not going to be able to just sort of walk away because they really need the United States in many ways and that's the leverage the US has in these situations," Goodman said. "But when the US exercises that leverage, it does have implications, both diplomatically and economically, especially if foreign investment slows in practice as a result of these kinds of incidents."