Hyundai raid shows Trump’s policies are getting in the way of his economic ambitions

By Chris Isidore, CNN

(CNN) — The Hyundai battery plant in Georgia that saw 475 workers arrested in immigration raid last week is just the latest example of President Donald Trump’s policies clashing with his goals for the world’s largest economy.

The Trump administration’s immigration enforcement efforts have had widespread impacts on the construction industry, according to a recent survey from the Associated General Contractors of America (AGC), a trade group of contractors involved in most types of building projects.

The survey of 874 members found that 5% reported a visit from immigration agents, and 10% said that workers either walked off the job or failed to show up to work because of actual or rumored immigration actions. A further 20% said they were indirectly impacted because their subcontractors lost workers.

But the immigration worries – with threats of arrest, detention, and deportation for workers – are just one way Trump’s policies are holding back construction. Tariffs are raising the cost of raw materials such as steel, aluminum and copper. And the on-again, off-again nature of Trump’s tariffs make basic planning difficult, if not impossible, for long-term projects like building a factory. Even as Trump heralds a manufacturing renaissance amid massive foreign investments, many businesses are putting their own construction plans on hold.

The AGC survey was conducted between July 8 and August 15, said Ken Simonson, the group’s chief economist – just as funding for immigration enforcement was starting to increase, he said.

“It’s the beginning of what I think will be very widespread and aggressive enforcement measures,” he said.

And Trump’s tariffs have raised US import duties to historically high levels – even as their ultimate fate remains with the courts.

The White House defended Trump’s policies as part of his larger economic agenda.

“There is no shortage of American minds and hands to grow our labor force, and President Trump’s agenda to create jobs for American workers represents this Administration’s commitment to capitalizing on that untapped potential while delivering on our mandate to enforce our immigration laws,” White House spokeswoman Abigail Jackson said in a statement to CNN.

“The Administration is working with our domestic steel, aluminum, and copper industries to ensure that they can meet the needs of American industry by expanding production right here at home,” the statement said.

But not everyone is convinced.

“The immigration and tariff policies are working at direct cross purposes with the effort to increase investment and construction here in the US, there’s no doubt about it,” said Mark Zandi, chief economist at Moody’s Analytics. “The cost of construction is rising and will continue and rise. It won’t short circuit that investment, but it certainly weighs on it.”

Hyundai says investment still on track

Hyundai said it will not change its plans to invest $26 billion in US facilities by 2028 in the wake of the raid. And it said it will work to make sure that its partners and contractors fully comply with immigration laws going forward.

“Hyundai’s investment in the United States is centered on creating thousands of high-quality American jobs, and that commitment remains unchanged,” the company said in a statement. “For highly technical projects, Hyundai may on occasion utilize global expertise, but all workers — whether local or international — are required to comply fully with US laws and regulations.”

And the Trump administration is defending the raid while denying it will slow foreign investment.

“The president said it himself in a statement that he put out on Sunday night where he is very grateful for foreign companies from around the world and the investments that they’re making right here in the United States of America,” White House press secretary Karoline Leavitt said Tuesday. “He understands that these companies want to bring their highly skilled and trained workers with them, especially when they’re creating very niche products like chips, or in this point, in this case, in Georgia, like batteries.”

“But the President also expects these foreign companies to hire American workers, and for these foreign workers and American workers to work together, to train and to teach one another,” she added. “And so he expects these foreign companies to hire American labor.”

Tariffs raising raw material prices

Simonson said there are early signs that the tariffs are raising prices of materials crucial to plant construction, including steel, aluminum and copper. And he said the impacts of Trump’s policies are just starting to be felt on job sites. The changing tariff policies are also keeping some construction plans on hold, he added.

“The effect of all these starts and stops and question marks is that owners are putting projects on the shelf, where they’re not giving the go-ahead to start work because they don’t know what their costs will ultimately be,” Simonson said.

More than 40% of general contractors have had upcoming projects canceled due to increasing costs, the AGC survey found, with 31% citing financing issues. But 26% also said plunging demand in the wake of Trump’s policies caused cancellations, with 16% specifically citing tariffs.

That means new investment announcements from foreign and domestic companies are likely being outweighed, at least for now, by projects that are being put on hold, Simonson said.

And splashy investment announcements at White House press conferences often fail to live up to the promises.

For example, in January, three top tech firms announced a $500 billion investment into infrastructure for artificial intelligence in the US, creating as many as 100,000 jobs over the coming years.

But the Wall Street Journal reported months later that the ambitious project had run into various hurdles, and its first-year goal had been significanly scaled back, the newspaper said.

In addition, some investments announced by the White House include funds that were already planned or committed before Trump returned to office.

Even if all the investments the White House has trumpeted over the past few months – totalling what Trump has called trillions of dollars – come to fruition, they won’t move the needle as much as one might think, said Zandi.

“The announced investment are planned to occur over many years. The actual investment that occurs in any one year is much smaller,” he said. “And the announcements are small in the context of a big economy.” (At about $30 trillion, the US economy is the largest in the world.)

Those investments will need foreign workers, as well. Foreign companies like Hyundai and LG will almost certainly bring in workers from their home countries when investing here. But even at domestic enterprises, foreign-born workers, many from Mexico and Latin America, hold a significant share of jobs at virtually any major construction project.

According to the AGC, 34% of construction workers are foreign born, compared to 18% of US workers overall. In Georgia, where the Hyundai plant is located, that share is 43%. In the country’s largest states the percentage goes even higher – 52% in California, 51% in Texas, 47% in Florida and 46% in New York.

Even with those foreign-born workers, the constuction industry needs more people. The AGC survey found that 92% of contractors reported having trouble finding the workers they need.

“Construction workforce shortages aren’t just a problem for the construction industry,” Simonson. “Construction projects of all types are being delayed because there aren’t enough qualified workers available for firms to hire.”

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