In a year already marked by economic turbulence, the collision of new U.S. tariffs and aggressive immigration enforcement is sending shockwaves through global supply chains, reshaping industries from Georgia’s factory floors to the bustling ports of Southeast Asia. As President Donald Trump’s administration doubles down on its economic nationalist agenda, both American and international businesses are grappling with the fallout—sometimes in ways that seem at odds with the administration’s own ambitions.
On September 5, 2025, federal agents descended on Hyundai Motor Co.'s $7.6 billion manufacturing complex in Ellabell, Georgia, detaining 475 workers in what Homeland Security called the largest single-site enforcement operation in its history. The raid, which targeted alleged immigration violations, was just the most dramatic example of a broader crackdown that’s been rippling through the U.S. construction and manufacturing sectors. According to a recent survey by the Associated General Contractors of America (AGC), 5% of contractors reported visits from immigration agents, 10% saw workers walk off the job or fail to show up due to enforcement fears, and 20% felt the pinch as their subcontractors lost labor.
"It’s the beginning of what I think will be very widespread and aggressive enforcement measures," Ken Simonson, AGC’s chief economist, told CNN. The survey, conducted between July 8 and August 15, coincided with a surge in federal funding for immigration enforcement—a move that’s left many in the industry on edge.
But immigration isn’t the only front on which Trump’s policies are colliding with business realities. The administration’s tariffs—some of the highest in U.S. history—have sharply raised the cost of raw materials like steel, aluminum, and copper. For contractors, the impact is immediate and severe: more than 40% report having projects canceled due to rising costs, with 16% pointing directly to tariffs as the culprit. "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 explained.
It’s a paradox that hasn’t gone unnoticed. Mark Zandi, chief economist at Moody’s Analytics, told CNN, "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. The cost of construction is rising and will continue and rise. It won’t short circuit that investment, but it certainly weighs on it."
Yet the White House insists its approach is deliberate and necessary. "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 has also emphasized its support for domestic industry, promising to work with American steel, aluminum, and copper producers to meet the nation’s needs.
Hyundai, for its part, says it’s undeterred. The company reaffirmed its commitment to invest $26 billion in U.S. facilities by 2028, even as it pledged to ensure compliance with all immigration laws. "Hyundai’s investment in the United States is centered on creating thousands of high-quality American jobs, and that commitment remains unchanged," the automaker stated. The company acknowledged that for highly technical projects, it sometimes relies on global expertise, but all workers—local or international—must follow U.S. regulations.
The Trump administration, meanwhile, is eager to highlight foreign investment as a sign of economic strength. White House press secretary Karoline Leavitt stated on September 9, "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." But she also added, "He 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."
Still, the reality on the ground is more complicated. AGC data shows that 34% of construction workers nationwide are foreign-born—a figure that climbs to 43% in Georgia, where Hyundai’s plant is located, and even higher in states like California and Texas. Despite this, 92% of contractors report difficulty finding enough workers, leading to delays across all types of construction projects. As Simonson put it, "Construction workforce shortages aren’t just a problem for the construction industry. Construction projects of all types are being delayed because there aren’t enough qualified workers available for firms to hire."
Meanwhile, the ripple effects of U.S. policy are being felt far beyond its borders. In 2025, the United States imposed aggressive reciprocal tariffs on Southeast Asian economies—some as steep as 40%—upending the export-led growth model that has powered the region’s rise. The April announcement of import duties as high as 49% on Cambodia, 46% on Vietnam, and 32% on Indonesia sent shockwaves through the region, with canceled export orders, factory closures, and a sharp contraction in foreign investment.
For Southeast Asia—a region whose combined GDP was just shy of $4 trillion in 2024 and whose exports to the U.S. hit a record $477 billion—the timing couldn’t have been worse. As the U.S. pressed for "re-industrialization" and the reshoring of manufacturing, countries like Vietnam and Thailand, which had benefited from the earlier "China+1" strategy (where companies relocated production from China to avoid tariffs), suddenly found themselves in Washington’s crosshairs.
By August 1, 2025, the Trump administration had revised some of the harshest tariffs downward: Vietnam and Malaysia saw their rates fall to 20% and 19%, respectively, while Indonesia, Thailand, and Cambodia secured deals at 19%. But the damage was already done. Economic forecasts initially predicted a 2.5% drop in ASEAN’s GDP after the April tariffs, and while the outlook improved slightly after the August adjustments, the threat of a global protectionist contagion looms large. Some research institutes warn that a worldwide 15% tariff hike could slash Southeast Asia’s economic output by 11% and hammer employment by as much as 25%, risking political instability.
The new tariffs are expected to be long-lasting. As the region’s governments have observed, there is little political appetite in Washington to roll back such measures—a lesson learned from the previous round of tariffs on China, which President Joe Biden left in place after taking office. The "China+1" strategy that once offered a lifeline is now closed, with the U.S. cracking down on attempts to reroute Chinese goods through Southeast Asia. Vietnam, for example, faces a potential penalty tariff of 40% on imports deemed to be transshipped from China, a move that could become a regional benchmark.
As Southeast Asia scrambles to adapt, scenarios for the future range from partial diversification—where more advanced economies like Vietnam pivot toward Europe and domestic innovation while poorer nations fall behind—to a radical, if unlikely, rebalancing that would see the region shift toward self-sufficiency and regional integration. Most analysts expect a middle path: slower growth, greater inequality, and a painful end to the era of unfettered export-led expansion.
Back in the U.S., splashy investment announcements—like the $500 billion AI infrastructure project unveiled by three top tech firms in January—have often failed to live up to their initial promises, with delays and scaled-back ambitions. Even if all the investments touted by the White House come to fruition, Mark Zandi of Moody’s Analytics cautions, "The announced investment are planned to occur over many years. The actual investment that occurs in any one year is much smaller. And the announcements are small in the context of a big economy."
As the dust settles, one thing is clear: the global economy is being reshaped not just by market forces, but by a new era of policy-driven uncertainty. For workers, businesses, and governments alike, the next chapter will demand resilience—and perhaps a willingness to rethink the very models that fueled decades of growth.
