S’Korea uncovers ‘Made in Korea’ breaches intended to bypass US tariffs

• Published On: 21 April 2025 at 20:18

South Korea's customs office reported on Monday an increase in attempts to mislabel foreign products, notably those from China, as Korean exports to avoid tariffs imposed by former US President Donald Trump.

This measure was intended to mitigate the impact of the US-China trade war, which has resulted in high tariffs on Chinese imports.

The Korea Customs Service disclosed that it discovered 29.5 billion won ($20.81 million) in country of origin violations in the first quarter, with shipments to the United States accounting for 97% of these infractions.

This follows a special probe conducted last month. In contrast, the total worth of violations in 2024 was 34.8 billion won, with 62% coming from shipments intended for the United States.

Trump, who took office in January, imposed significant tariffs on a variety of products and countries, including rising taxes on China beginning in February.

"There was an increase in disguised export attempts during Trump's first presidency, and we anticipate a similar trend," said Lee Kwang-woo, investigation planning director at the KCS.

Authorities launched the most recent inquiry to prevent unlawful shipments because they anticipated rising hazards.

During a media briefing, Lee stated that efforts to circumvent Trump's tariffs had already been detected in the first quarter.

On Monday, South Korean customs authorities met with US officials to discuss coordinated investigation efforts.

South Korean officials have cautioned that foreign corporations, notably those from neighbouring China, may increasingly utilise South Korea—a key US ally with a free-trade agreement—as a route around tariffs and restrictions.

This month, Trump put a 25% duty on South Korea as part of a new round of sweeping tariffs, which were eventually halted for three months.

Meanwhile, the United States has imposed a 145% tariff on China following a series of retaliatory measures in a trade conflict that experts believe has significantly hampered trade between the world's two largest economies.

Monday's investigations revealed that 3.3 billion won worth of cathode materials used in batteries were imported from China and improperly labelled as South Korean origin before being shipped to the United States. This attempt to avoid high tariffs occurred in January, before Trump's tariffs were implemented.

Furthermore, in March, 19.3 billion won worth of surveillance cameras were imported from China in parts, reassembled in South Korea, and delivered to the United States to avoid prohibitions on Chinese communication equipment.

Some of the goods have already been shipped abroad, while others are still at the dock.

In response, the Korea Customs Service has formed a special task force to combat unlawful exports of such commodities and is working on further specific steps to protect domestic businesses.