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

The Korea Customs Service said it has found 29.5 billion won ($20.81 million) worth of country-of-origin violations from the first quarter, with U.S.-bound shipments accounting for 97% of the total, after a special probe last month.

That compared to a total of 34.8 billion won worth of violations for all of 2024, among which U.S.-bound shipments accounted for 62%.

Since taking office in January, Trump has introduced big tariffs on various products and countries that started to come into force in March.

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 U.S. ally and has a free-trade pact, as a bypass to avoid tariffs and regulations.

Trump slapped 25% tariffs on South Korea this month, which were later suspended for three months. The U.S. now imposes 145% tariffs on China after back-and-forth retaliatory actions, which economists say have severed trade between the world's two biggest economies.

Monday's findings include 3.3 billion won worth of cathode materials used for batteries, imported from China and shipped to the U.S. with South Korea falsely marked as the country of origin, to avoid already high tariffs in January even before 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 U.S. restrictions on Chinese communication devices.

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.