U.S. Immigration Policy and Its Impact on South Korean FDI: Assessing Risks and Opportunities Post-Georgia Raid

The September 2025 immigration raid at a Hyundai-LG battery plant in Georgia has become a flashpoint in the broader debate over U.S. immigration enforcement and its implications for foreign direct investment (FDI), particularly from South Korea. The operation, the largest single-site ICE enforcement action in U.S. history, detained 475 workers, including over 300 South Korean nationals, many of whom were legally employed under short-term visa categoriesSouth Korea president says Korean companies will hesitate to maintain or make direct investments in the United States^[1]. This event has exposed systemic challenges for South Korean firms operating in the U.S., from visa compliance to diplomatic tensions, while also highlighting potential opportunities for policy reform and long-term strategic adaptation.

Immediate Impacts on South Korean FDI

The raid disrupted 22 South Korean manufacturing projects in the U.S., spanning autos, shipbuilding, and electrical equipment, with construction delays and added compliance costs now loomingKorea's major US investment projects halted as detained ...^[6]. South Korea's Foreign Minister Cho Hyun traveled to Washington to negotiate the release of detained workers and to address broader visa concernsUrgent meeting with U.S.-investing Korean firms after Georgia visa raid^[3]. While Hyundai has pledged to continue its $26 billion investment in U.S. facilities by 2028South Korea president says Korean companies will hesitate to maintain or make direct investments in the United States^[1], the incident has raised alarms about the viability of relying on short-term visas like the B-1 or ESTA for deploying technical experts, which are not legally permitted for hands-on workUrgent meeting with U.S.-investing Korean firms after Georgia visa raid^[4].

South Korean President Lee Jae Myung has emphasized that the U.S. visa system does not accommodate the needs of firms seeking to establish and manage new facilitiesSouth Korea president says Korean companies will hesitate to maintain or make direct investments in the United States^[1]. This mismatch has prompted urgent discussions between U.S. and South Korean officials about creating a new visa category for investment-related workSouth Korea president says Korean companies will hesitate to maintain or make direct investments in the United States^[1]. However, the Trump administration's defense of the raid—as a measure to prioritize American workers—has complicated these negotiationsHyundai raid shows Trump's policies are getting in the way^[5].

Risks for South Korean Investors

1. Compliance and Operational Costs: The raid has forced South Korean firms to reassess their reliance on non-U.S. workers and invest in stricter immigration compliance measuresHyundai raid shows Trump's policies are getting in the way^[5]. Legal experts warn that such disruptions could deter future investments if visa pathways remain constrainedUrgent meeting with U.S.-investing Korean firms after Georgia visa raid^[4].
2. Diplomatic Tensions: The incident has strained U.S.-South Korea relations at a critical juncture, as both nations finalize a trade deal and a $350 billion investment fundUrgent meeting with U.S.-investing Korean firms after Georgia visa raid^[3]. South Korea's resistance to terms it views as unfair compared to Japan's has further complicated negotiationsUrgent meeting with U.S.-investing Korean firms after Georgia visa raid^[3].
3. Labor Shortages and Delays: Construction projects in high-tech sectors like EVs and battery manufacturing now face delays, threatening timelines and profitabilityKorea's major US investment projects halted as detained ...^[6].

Opportunities Amid Uncertainty

1. Policy Reforms: The crisis has accelerated calls for a streamlined U.S. visa system that balances labor protections with the needs of global firms. South Korea has signaled willingness to collaborate on such reformsSouth Korea wants workers detained in immigration raid to be able to re-enter U.S.^[2].
2. Long-Term Compliance Benefits: Firms that adapt to stricter immigration rules may gain a competitive edge in the U.S. market, particularly in sectors where regulatory compliance is criticalHyundai raid shows Trump's policies are getting in the way^[5].
3. Bilateral Cooperation: The incident has underscored the importance of U.S.-South Korea economic ties, with both nations recognizing the need for a stable framework to support joint projects like the "Make American Shipbuilding Great Again" initiativeUrgent meeting with U.S.-investing Korean firms after Georgia visa raid^[3].

Conclusion

The Georgia raid has exposed vulnerabilities in the U.S. immigration system and its impact on foreign investment, particularly for South Korean firms. While the immediate risks—compliance costs, diplomatic friction, and operational delays—are significant, the incident also presents an opportunity for policy innovation. If the U.S. and South Korea can align on a visa framework that supports skilled labor mobility without compromising labor protections, the long-term benefits for both economies could outweigh the short-term challenges. For now, South Korean investors must navigate a landscape of uncertainty, balancing caution with strategic engagement in the U.S. market.