South Korea finds 'Made in Korea' breaches intended to bypass US tariffs

South Korea’s customs agency has uncovered a surge in efforts to falsely label foreign goods—mostly from China—as South Korean exports in an attempt to bypass steep U.S. tariffs introduced by President Donald Trump, officials said Monday.

The Korea Customs Service (KCS) announced it has detected 29.5 billion won (approximately $20.81 million) in origin-related violations during the first quarter of this year, with 97% of the illicit shipments headed for the United States. This sharp uptick comes amid growing concerns about foreign companies exploiting South Korea’s trade ties with the U.S. to evade punitive tariffs.

The latest figure is already approaching the 34.8 billion won total for all of 2024, when U.S.-bound shipments made up 62% of violations. According to KCS investigation planning director Lee Kwang-woo, the surge in violations follows patterns seen during Trump’s first presidency, when similar tactics were used to sidestep trade restrictions.

“Disguised export attempts increased under Trump’s previous administration, and we expect a comparable trend this time,” Lee said during a press briefing. He added that the KCS had acted preemptively in conducting a special investigation last month, anticipating greater risk as Trump’s tariff policy took effect.

South Korea, a key U.S. ally and party to a free trade agreement with Washington, is seen as an attractive transshipment point for companies—particularly in neighboring China—looking to avoid U.S. trade barriers. On Monday, South Korean customs officials met with their American counterparts to coordinate joint investigations into such practices.

One example highlighted in the KCS report involved 3.3 billion won worth of cathode materials—key components in battery production—that were imported from China but falsely labeled as South Korean before being shipped to the U.S. These shipments took place in January, prior to Trump’s new tariff package but still aimed at dodging existing high U.S. duties on Chinese goods.

President Trump, who began his second term in January, has reintroduced aggressive trade policies, including a 25% tariff on South Korean goods—though this has been temporarily suspended for three months. Meanwhile, tariffs on Chinese imports have soared to 145% following escalating retaliatory measures that have drastically disrupted trade between the world's two largest economies.

South Korean authorities say they will continue to crack down on attempts to exploit the country’s favorable trade status, particularly as global supply chains shift in response to evolving geopolitical tensions.

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