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Increase in Mislabeling Foreign Goods as Korean Exports

SEOUL (Reuters) – South Korea has reported a noticeable uptick in efforts to misrepresent foreign commodities as domestic exports, primarily originating from China, in an effort to circumvent tariffs imposed by the United States, as indicated by the Korea Customs Service on Monday.

According to the customs agency, approximately 29.5 billion won (around $20.81 million) worth of country-of-origin infractions were identified in the first quarter of the year, with a staggering 97% of these violations linked to shipments destined for the U.S. This represents a significant increase from the total violations recorded for the entirety of 2024, which amounted to 34.8 billion won, with 62% concerning U.S.-bound goods.

Since assuming the presidency in January, Donald Trump has enacted substantial tariffs on a variety of products from different nations, with many of these measures taking effect beginning in March.

Officials in South Korea have expressed concerns that foreign entities, particularly those from China, may increasingly attempt to exploit South Korea’s status as a key U.S. ally and participant in a free-trade agreement, using it as a channel to evade tariffs and regulatory measures.

Earlier this month, Trump imposed a 25% tariff on imports from South Korea, although this levy has since been suspended for a three-month period. In retaliatory actions against China, the U.S. has escalated tariffs to 145%, a move that economists suggest has significantly disrupted trade relations between the two largest economies in the world.

The customs authority’s revelations include instances such as 3.3 billion won worth of cathode materials intended for battery production—imported from China and then falsely labeled as South Korean for export to the U.S. This maneuver occurred as early as January, prior to the implementation of Trump’s tariffs.

Additionally, in March, South Korea witnessed 19.3 billion won worth of surveillance cameras being imported as parts from China, only to be reassembled domestically to sidestep U.S. restrictions on Chinese communication devices.

In response to this rising trend, the Korea Customs Service has initiated a dedicated task force aimed at curtailing illegal export practices and is strategizing further measures to safeguard local businesses against such practices.

($1 = 1,417.4900 won)

Source
finance.yahoo.com