The South Korean Customs Service (KCS) announced on Monday that they have recently uncovered multiple cases of Chinese companies falsely labeling their products as “Made in Korea” for export to the United States, with a total amount exceeding $20 million. This comes as high-level discussions between the US and South Korea on Trump’s tariff issues are about to take place, drawing attention from the public.
In the first quarter of this year, the amount of such illegal exports reached 29.5 billion Korean won (approximately $20.81 million), with 97% of the products being exported to the United States. In comparison, the total illegal exports in 2024 amounted to 34.8 billion Korean won, with 62% of that being exported to the US.
One of the cases uncovered involved the false labeling of battery cathode materials worth 3.3 billion Korean won, imported from China and then exported to the US marked as originating from Korea, in an attempt to bypass the high existing tariffs before Trump’s new policies.
Another incident occurred in March, where components of surveillance cameras worth 19.3 billion Korean won were imported from China, assembled in Korea, and then exported to dodge the US restrictions on Chinese communication equipment.
This kind of violation, known in the industry as “origin laundering,” involves the falsifying or altering of the origin labels of products to evade tariffs, bans, or other trade restrictions of the importing country. Common practices include performing the simplest processing or package alteration in a third country to circumvent trade control regulations.
Lee Kwang-woo, a customs investigation officer, stated, “There has been a trend of disguised exports during President Trump’s first term, and we anticipate a recurrence of such incidences.”
He also mentioned that the South Korean authorities had initiated investigations since President Trump took office to prevent the expansion of such activities. On Monday, officials from South Korea and the US Customs held a meeting to discuss enhancing joint inspection measures.
South Korean officials indicated that some foreign enterprises might exploit the position of South Korea and the US signing a free trade agreement to evade US tariffs through transshipment. The Customs Service has set up a dedicated team and will refer the violations to the prosecution for further action.
Acting President of South Korea Han Duck-soo stated on Monday that Finance Minister Choi Sang-mok and Trade Minister Ahn Duk-geun are expected to meet with US Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer in Washington on the 24th.
The meeting is scheduled during the Spring Meetings of the International Monetary Fund (IMF) and the World Bank. South Korean officials previously stated that the talks were initiated based on a proposal from the US, and the related issues and schedules are still being coordinated.
The meeting is expected to cover topics such as US tariff policies and bilateral trade arrangements. The US and South Korea have signed a free trade agreement, and this meeting is seen as an important dialogue within the bilateral economic and trade mechanism.
Han Duck-soo mentioned that negotiations with the US “may not be easy,” but South Korea will “calmly and seriously” coordinate with the US following the principle of national interests and will “fully” seek feasible solutions. He also noted the public expectations and concerns about the negotiations, emphasizing that the South Korean government will approach the matter cautiously.
In response to recent US tariff policies, South Korean companies have also accelerated their expansion into the US market. Hyundai Motor Group announced a memorandum of understanding with Posco to build a steel plant in Louisiana, the US.
According to the announcement, the total investment for the plant is $5.8 billion, with an annual production capacity of 2.7 million tons, scheduled to start operation in 2029.
Last month, the Chairman of Hyundai Motor Group met with President Trump at the White House and declared a future investment of $21 billion in the US, with the steel plant being part of that plan.