After the mass arrest and detention of 300 Korean workers over visa issues while building an advanced manufacturing plant in the U.S., Korean companies that had announced large-scale investments in America are now acutely aware of the risks in the U.S. market.
Earlier this year, Korean firms rushed to announce U.S. investments in an effort to avoid the “tariff bomb” triggered by President Trump. Ahead of the Korea-U.S. summit, the Korean government assembled a massive investment package, prompting even companies that had already committed to invest to unveil additional plans - bringing the total to $150 billion (approximately 209 trillion won). One executive from a major conglomerate remarked, “Given the circumstances, we’ve ended up investing more than we actually needed, almost as if we were pushed into it.”
In this climate, the Trump administration’s policies - such as cutting subsidies and tightening immigration enforcement, which stand in stark contrast to the previous Biden administration - are fueling concerns among Korean businesses. Some are even saying, “If the market is this unpredictable, it might be better to reconsider our investments and just pay the tariffs.”
Korean companies have long been reluctant to build manufacturing facilities in the United States. Labor costs are significantly higher than in Korea, yet skilled workers are hard to find. A semiconductor industry insider noted, “Many plants are being built in rural areas of the U.S. where income levels are low, and most local workers have never seen a semiconductor cleanroom - let alone participated in constructing a large-scale facility.” He added, “Despite the high labor costs, companies have to train these workers, build advanced facilities on schedule, and partner with nearby universities to ensure a steady talent pipeline - essentially creating an entirely new ecosystem from scratch.”
According to a 2021 report by the Semiconductor Industry Association, the total cost of operating an advanced system semiconductor plant in the U.S. for 10 years is 28% higher than in Korea. If the cost in the U.S. is indexed at 100, Korea, Taiwan, and Japan come in at 78, while China is at 63. In other words, the U.S. is not a cost-efficient location for owning and operating semiconductor plants. The burden from labor cost disparities outweighs even the impact of reciprocal tariffs (15%) and automotive tariffs (25%, though a 15% rate was agreed upon but not implemented) currently applied to Korean exports.
All costs are paid in U.S. dollars, and with both exchange rates and inflation rising, the surge in labor and raw material expenses has become a major burden. According to a 2023 Reuters report, the cost of building Samsung Electronics’ semiconductor plant in Taylor, Texas is expected to exceed $25 billion - 47% higher than the original estimate of $17 billion (₩34.75 trillion). That’s more than ₩11 trillion in additional spending. Reuters cited a local source saying that roughly 80% of the cost increase was due to rising material prices.
Cost inflation continues to climb. The Trump administration has maintained high tariff policies, including a 50% import duty on steel. These measures have contributed to inflation, further driving up the cost of establishing manufacturing facilities in the U.S.
The biggest issue is uncertainty - something once unimaginable in the United States, a model of free-market capitalism. The previous Biden administration offered large-scale subsidies to offset the notoriously high costs of operating in the U.S. and to attract manufacturing investment. But that promise has been completely reversed. In 2025, the Trump administration not only moved to reduce or eliminate subsidies, but even floated the unprecedented idea of acquiring equity stakes in investing companies.
Immigration enforcement has followed a similar reversal. In 2021, the Biden administration announced a halt to large-scale workplace raids targeting undocumented workers - a move closely tied to its investment promotion strategy. Georgia, home to Hyundai’s plant and several Korean battery firms, benefited significantly. In contrast, Trump’s second term has tightened visa issuance and reversed immigration policies, placing greater pressure on foreign investors. This shift culminated in a high-profile raid on the Hyundai-LG plant, which was widely reported by global media.
*A representative from a Korean company remarked, “What businesses fear more than losses is uncertainty. The unpredictability of the U.S. market makes it nearly impossible for companies to commit to long-term investment plans.”
tl;dr: America is fuck, do not invest.
