South Korea uncovers ‘Made in Korea’ breaches intended to avoid US tariffs

The Korea Customs Service said it found 29.5 billion won (S$27 million) worth of country-of-origin violations in the first quarter. PHOTO: REUTERS

SEOUL - South Korea has found increasing attempts to disguise foreign products, mostly from China, as Korean exports to avoid US President Donald Trump’s sweeping tariffs, said its customs agency on April 21.

The Korea Customs Service (KCS) said it found 29.5 billion won (S$27 million) worth of country-of-origin violations in the first quarter, with US-bound shipments accounting for 97 per cent of the total, after a special probe in March .

That compared with a total of 34.8 billion won worth of violations for the whole of 2024, among which US-bound shipments accounted for 62 per cent.

Mr Trump, who took office in January, has imposed significant tariffs on various products and countries, including those on China that began to rise from February.

“There was a rise in disguised export attempts during Trump’s first presidency, and we expect there to be a similar trend,” said Mr Lee Kwang-woo, investigation planning director at the Korea Customs Service.

Anticipating increased risks, the authorities conducted the latest investigation pre-emptively to prevent illegal exports. They have already found signs of such attempts to avoid Mr Trump’s tariffs from the first quarter, Mr Lee said during a media briefing.

On April 21, South Korean Customs officials held a meeting with US officials to discuss joint investigation efforts.

South Korean officials have said there could be a rise in attempts by foreign companies, such as those in neighbouring China, to use South Korea – which is a major US ally and has a free-trade pact – as a bypass to avoid tariffs and regulations.

Mr Trump slapped tariffs of 25 per cent on South Korea in April, which were later suspended for three months. The US now imposes tariffs of 145 per cent on China after back-and-forth retaliatory actions, which economists say have severed trade between the world’s two biggest economies.

The April 21 findings include 3.3 billion won worth of cathode materials used for batteries, imported from China and shipped to the US with South Korea falsely marked as the country of origin, to avoid already high tariffs in January, even before Mr Trump’s tariffs took effect.

In March, 19.3 billion won worth of surveillance cameras were imported from China in parts and reassembled in South Korea to bypass US restrictions on Chinese communication devices.

Some of the goods have been shipped abroad while others are still at the port.

The Korea Customs Service has launched a special task force to prevent illegal export attempts and plans to come up with more specific response measures to protect domestic companies. Meanwhile, the violations discovered will be referred to prosecutors. REUTERS

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