ICE raid threatens to unravel South Korea’s wins with Trump

Soo-Hyang Choi ·

The detention of hundreds of South Koreans in a US immigration raid sent shock waves through the Asian nation and plunged Lee Jae Myung into the biggest diplomatic challenge of his young presidency.

Lee, who’s won accolades at home and around the world for his deft handling of his US counterpart, was caught off guard by the raid at an under-construction Hyundai Motor Co.-LG Energy Solution Ltd. battery plant in the state of Georgia. Trying to contain the fallout, he quickly dispatched his top diplomat, to seek the return of about 300 workers. Lee said Tuesday that the detainees will return home soon, as South Korea prepares to send a chartered plane to pick them up.

But Foreign Minister Cho Hyun’s mission will go beyond the immediate fire fighting. The incident trains the spotlight on a multibillion-dollar investment plan and the carefully calibrated diplomacy that helped South Korea land one of the most favorable tariff deals in the world. As part of that agreement reached in July, the country pledged a $350 billion investment package - now suddenly a perilous proposition for companies reliant on Korean workers and subcontractors to get manufacturing sites up and running.

“This incident has exposed the limits of what the government can actually do,” said Kim Tae-Hyung, a political science professor at Soongsil University. “Trump’s unpredictability and the tendency to act on his own whims are very annoying, but this is the reality that cannot be ignored. The government must be deeply embarrassed.”

South Korea is caught between two of US President Donald Trump’s key policies: re-industrialization and curbing immigration. That creates a treacherous terrain, where the usual tactics may be ineffective on such core issues for the president’s base. The fact that border czar Tom Homan was the US administration’s main voice on the Georgia raid shows the type of framing and attention the White House was seeking.

And while there are no signs that the incident will undo the trade agreement and prompt Trump to hike tariffs, it risks undermining his drive to bring manufacturing to the US by making companies more reluctant to invest as they struggle to find easy visa options to bring their workers in legally and flexibly.

‘Lasting Damage’

Koreans were transfixed by the images of Immigration and Customs Enforcement agents corralling their countrymen shackled at the wrist, waist and ankles. That sense of shared humiliation threatens to undermine a close military and economic alliance. For Lee, who took office in June, it’s an unexpected hurdle as he looks to leverage his growing rapport with Trump into defense commitments.

The images “will do lasting damage to America’s credibility,” said John Delury, a senior fellow at the Asia Society. “How can a government that treats Koreans this way be relied upon as an ‘ironclad’ ally in a crisis?”

“This is not the end of the alliance but it sure doesn’t look like ‘katchi kapshida,’” he said, referring to a military slogan that means “we go together” in Korean.

The two leaders got off to a bright start, with South Korea’s approach focused on showing flexibility in dealing with the Trump administration, which helped the country secure a 15% tariff cap. Lee even navigated a high-stakes Oval Office meeting - there were worries of a ‘Zelenskiy moment’ - and came out with what looked like a stronger relationship.

Trump echoed those sentiments when he downplayed the raid and said the relationship with South Korea is “really good” even as he urged foreign companies investing in the US to respect the country’s immigration laws.

Deadlock

The detained South Korean workers were skilled equipment engineers employed by LG Energy as well as contractors hired by the company who had years of experience in battery manufacturing, according to people familiar with the situation. The workers had essential knowledge needed to set up the facility that was not available in the US and most of them were on ESTA or B-1 visas, one of the people said.

LG Energy declined to comment on the status of the workers when reached by Bloomberg News.

After the White House meeting, the two leaders expressed optimism for close cooperation and Trump praised Lee. One area of intense negotiation is shipbuilding, an example of Seoul capitalizing on its advanced industries to win advantages elsewhere. And that’s the part of the plan that is all of a sudden on shakier ground.

“Unless these problems are addressed, there’s no way such investments can proceed,” said Kim Yong-beom, director of national policy at South Korea’s presidential office. Even before the raid, the two countries had been locked in a stalemate over details of the $350 billion fund, with Kim warning that the shipbuilding partnership is also at risk if they fail to narrow the differences.

Lee’s opponents at home were quick to frame the incident as a “diplomatic disaster,” highlighting the risks that go beyond the arena of global diplomacy for a president who took over after a long period of political upheaval.

A beaten-down opposition, still reeling from last year’s failed attempt to impose martial law, is latching on to the issue, framing it as a sign of the government’s incompetence. A protest - a few dozen people so far - has started outside the US embassy in Seoul.

“President Lee Jae Myung must clearly explain what tangible gains, if any, he has secured from the summit after recklessly spending people’s money,” the People Power Party said in a statement.

Domestic Peril

His 63% approval rating makes Lee one of the most popular South Korean leaders in recent history, with his diplomatic guile a key factor in a weekly tracking poll released Friday. In the early hours of the crisis, Lee showed the same methodical and cautious approach that helped him win over Trump - he famously spent his vacation preparing the meeting, practicing scenarios and reading up on the US leader.

“I feel a great sense of responsibility,” Lee said at a Cabinet meeting in Seoul on Tuesday, his first public remarks on the incident. “I hope there will never again be any unjust infringements on the activities of our citizens and businesses working for the joint development of South Korea and the US.”

The administration may be hoping to frame the quick return of the workers as another diplomatic victory. But that may be difficult, with companies trying to gauge the effect on their investments, which may delay announcements and risk turning Trump impatient. Commerce Secretary Howard Lutnick earlier said that tariffs on Japanese goods would go “back up” if the country did not abide by the terms of the agreement - part of a broader trade pact the countries struck in July.

A survey on 14 South Korean companies building plants in the US released Monday showed 57% of the respondents are considering adjusting ongoing projects in the country, according to a Korea Economic Daily report.

“Backlash is already brewing,” said Andrew Yeo, a senior fellow at the Brookings Institution. “South Korean companies, particularly those in the EV battery and auto industry, may be reluctant to pursue further investments in the US.”