In South Korea and Japan, Fury at U.S. Fuels Backlash Over Trade Deals

In the span of 24 hours last week, President Trump managed to roil both South Korea and Japan, two longtime allies that less than two months earlier had said they would invest a combined nearly $1 trillion in the United States in exchange for lower tariffs.

Last Thursday, U.S. immigration officials raided the construction site of a major Hyundai-LG plant in Georgia, a flagship project by two of South Korea’s most prominent companies. Hundreds of South Korean citizens were arrested and detained for, according to federal officials, living or working in the country illegally.

On the same day, Mr. Trump signed an executive order enacting a trade deal he had struck with Japan in July, committing Japan to invest $550 billion in the United States. The order codified the reduced automotive tariffs that Tokyo had desperately sought. However, it came with a memorandum of understanding between the two countries stating outright that Mr. Trump, not Japanese officials, will select how the $550 billion will be invested. If Japan goes against his wishes, he will have the right to impose higher tariffs.

In both Japan and South Korea, increasingly vocal leaders in government and business feel their countries were strong-armed and are questioning whether it still made sense to comply with Mr. Trump’s demands.

While Seoul worked to bring home more than 300 South Korean workers, Chosun Ilbo, the country’s conservative daily newspaper and traditionally an advocate of a strong alliance with the United States, argued that its government must “recognize the seriousness of the situation.” In an editorial on Monday, the newspaper urged officials to convey to the United States that the South Korean public is now questioning whether it should continue investing in America.

“It inevitably raises fundamental questions about what ‘alliance’ really means to the U.S.,” Chosun Ilbo wrote.

In a statement, Anna Kelly, a White House spokeswoman, said Mr. Trump had “leveraged” his relationships with leaders of both countries “to negotiate historic economic agreements that expanded markets for American industries and delivered major investments into our economy.”

The public anger is complicating South Korea’s attempt to hammer out the details of a trade agreement reached in late July. The United States agreed to lower its tariffs on South Korean goods to 15 percent from 25 percent in exchange for a commitment that Korean companies would invest $350 billion in the United States, including $150 billion dedicated to strengthening America’s shipbuilding sector.

Lee Jae Myung, South Korea’s president, said on Wednesday that the country’s businesses were “flummoxed” by the raid because “they were not there as long-term or permanent workers but as technicians who helped install facilities and equipment.”

If the United States does not help such people work safely in the country, South Korean businesses would “hesitate to make direct investments.” While he declined to elaborate on the ongoing negotiations for a trade deal, Mr. Lee explained why the process was difficult.

“We will not make a decision that goes against our national interests,” he said. “We will not engage in negotiations that are not rational or just.”

South Korea’s foreign minister, Cho Hyun, told the nation’s legislature on Monday that, in light of the raid at the battery factory in Georgia, the country was demanding allocations for more visas for South Korean workers as part of the trade negotiation.

In a social media post on Monday, Mr. Trump said he would “make it quickly and legally possible” for foreign companies investing in America to send their people to build products in the United States, but added that they needed to hire and train American workers.

Mr. Trump’s main concession in the deal was a reduction in tariffs for South Korea’s important automotive sector. But that now hangs over the negotiations because the lowered duty has not gone into effect. The two countries are in talks this week, trying to iron out how South Korea’s investments will be made, but Seoul is already signaling that it cannot agree to the types of concessions that Japan agreed to last week.

“No Korean would sign that draft as is,” Kim Yong-beom, the chief policy coordinator in Mr. Lee’s office, said at a public forum on Tuesday.

Mr. Kim added that the government would not proceed with the plans for investing in shipbuilding — labeled by South Korean officials the Make American Shipbuilding Great Again initiative — without an agreement on how the rest of the investment into the United States would be put in place. Mr. Trump has repeatedly vowed to resurrect the maritime industry in the United States, which would require the help of South Korea, the world’s second-largest shipbuilder after China.

And looming over the South Korean talks is the cautionary tale of Japan, which made a deal that some commentators say abdicated financial sovereignty to Mr. Trump. The details that were laid out in the memorandum of understanding, which was published in the Japanese news media, underscore how Japan had to capitulate or risk damaging its economy.

Among the notable provisions of the memorandum is a clause stipulating that Mr. Trump will select Japan’s investments. Once a choice is made, Japan will review and fund the investment within 45 days, according to the document. If Japan chooses not to move ahead, Mr. Trump may impose tariffs at a higher rate of his choosing, the document stated.

Japan would initially receive half of the cash flow generated by the investment until an agreed-upon threshold was reached. After that, Japan would receive 10 percent of the cash flow. The rest of the money would go to the United States.

Masahiko Hosokawa, a former senior official at Japan’s trade ministry, said the Japanese government had to agree to these terms for “damage control” to lower automotive tariffs. But he said he believed that the process was unlikely to unfold in the way that some Trump administration officials had proclaimed.

“It’s a mistake to think that America will ask for money for something and Japan will just give it,” Mr. Hosokawa said. “Japan did not become America’s A.T.M.”

On Sunday, Japan’s beleaguered prime minister, Shigeru Ishiba, announced his intention to step down, adding a layer of political uncertainty in Tokyo. The trade deal and investment commitment will remain hot-button issues heading into a leadership vote early next month for the ruling Liberal Democratic Party.

David Boling, a director of Japan and Asia trade at the Eurasia Group and a former U.S. trade negotiator, said Japan had little choice but to accept Mr. Trump’s terms. Playing hardball with the White House is not a viable option because the United States has shown a willingness to retaliate and push tariffs to backbreaking levels.

“It would be very risky for Japan to really put up a fuss, where you might risk retaliation,” he said. “It is just the reality when you’re dealing with Trump. You have to be very pragmatic.”

Choe Sang-Hun and Jin Yu Young contributed reporting.