South Korea’s customs agency on Monday reported a rise in attempts to mislabel foreign products, particularly those from China, as Korean exports to evade the tariffs imposed by former US President Donald Trump.
This move was aimed at circumventing the impact of the US-China trade war, which resulted in hefty tariffs on Chinese goods.
The Korea Customs Service revealed that it uncovered violations worth 29.5 billion won ($20.81 million) related to country of origin in the first quarter, with 97% of these violations involving shipments to the US.
This follows a special investigation last month. In contrast, the total value of violations for all of 2024 was 34.8 billion won, with US-bound shipments accounting for 62%.
Trump, who assumed office in January, implemented substantial tariffs on a range of products and countries, including escalating tariffs on China starting in February.
“There was a rise in disguised export attempts during Trump’s first presidency and we expect there to be a similar trend,” said Lee Kwang-woo, investigation planning director at the KCS.
Foreseeing increased risks, authorities initiated the latest investigation as a precaution to prevent illegal exports.
During a media briefing, Lee stated that signs of efforts to bypass Trump’s tariffs had already been identified in the first quarter.
On Monday, South Korean customs officials held a meeting with US officials to discuss collaborative investigation efforts.
South Korean authorities have warned that foreign companies, particularly from neighboring China, may increasingly use South Korea—a key US ally with a free-trade agreement—as a way to circumvent tariffs and regulations.
This month, Trump imposed a 25% tariff on South Korea as part of a new wave of sweeping levies, though these were later suspended for three months.
Meanwhile, the US now imposes a 145% tariff on China following a series of retaliatory measures, a trade dispute that economists believe has severely disrupted commerce between the world’s two largest economies.
Monday’s findings revealed 3.3 billion won worth of cathode materials, used in batteries, imported from China and falsely labeled as South Korean origin for shipment to the US. This attempt to evade high tariffs occurred in January, before Trump’s tariffs took effect.
Additionally, in March, 19.3 billion won worth of surveillance cameras were imported from China in parts, reassembled in South Korea, and shipped to the US to circumvent restrictions on Chinese communication devices.
Some of the goods have already been shipped abroad, while others remain at the port.
In response, the Korea Customs Service has established a special task force to prevent illegal exports of such goods and is developing more targeted measures to protect domestic companies.
