‘Made in South Korea’: Allegations Surrounding Chinese Companies
Chinese companies are reportedly circumventing hefty U.S. tariffs by mislabeling their exports as products from South Korea, according to a report by Nikkei Asia. The Korea Customs Service revealed that fraudulent exports labeled as South Korean goods reached 29.5 billion won in the first quarter of 2025, with a staggering 97% of these goods destined for the U.S. Alarmingly, the amount of fraud detected so far this year has already surpassed 85% of the total for all of 2024. This situation has prompted South Korea to take action against these deceptive practices, which could jeopardize its trade reputation and domestic industries.
Details of the Fraudulent Practices
The Korea Customs Service has identified various schemes employed by Chinese companies to evade tariffs. One notable case involves mattresses manufactured in China, which are subject to anti-dumping duties in the U.S. These mattresses were stored in warehouses operated by a company registered under a Chinese national’s name in South Korea before being exported to the U.S. as if they were South Korean products. Additionally, anode materials used in rechargeable batteries were shipped from China, repackaged in South Korea, and then falsely labeled before export. Another example includes parts for surveillance cameras that were imported into South Korea, assembled there, and then exported under the guise of being domestically made.
Government Response and Investigations
In light of these findings, South Korea’s customs agency has established a special task force dedicated to investigating and addressing these fraudulent trade practices. Authorities have expressed concern that such tactics could undermine South Korea’s credibility in international trade and negatively impact domestic industries that comply with global regulations. The crackdown on these deceptive practices is particularly timely, as South Korea is set to engage in new trade negotiations with the United States this week. Analysts suggest that this move may be a strategic effort to demonstrate South Korea’s commitment to preventing the indirect export of Chinese goods, a significant concern for U.S. officials.
Implications for U.S.-South Korea Trade Relations
The timing of South Korea’s crackdown coincides with ongoing trade talks with the United States, where U.S. officials are expected to press their South Korean counterparts on measures to prevent tariff circumvention. The Trump administration has imposed tariffs on Chinese goods that have reached as high as 145%. While South Korean goods have also faced “reciprocal” tariffs, currently on a 90-day pause, their rate of 10% remains significantly lower. In response to the situation, China’s Ministry of Commerce has stated that it will reject any trade deal that compromises Chinese interests and has vowed to implement countermeasures if necessary. This complex web of international trade dynamics underscores the challenges both countries face in navigating their economic relationships.
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