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Photo courtesy of Yonhap News |
[Alpha Biz= Kim Jisun] According to an exclusive report by the Korea Economic Daily, Korean companies exporting to the United States are increasingly being subjected to tariffs exceeding 100%, as U.S. authorities classify products that contain even partial Chinese-origin raw materials as Chinese-made goods. Despite the tariff framework announced following last month’s Korea–U.S. summit, significant uncertainty remains in its implementation.
Industry sources told the Korea Economic Daily that the U.S. Customs and Border Protection (CBP) has intensified its country-of-origin verification since September, sharply increasing the number of Korean exports subject to high tariff rates.
One Korean auto parts supplier, referred to as Company S, had previously exported duty-free under the KORUS FTA. However, it is now facing a 160% tariff, made up of:
10% reciprocal tariff
25% retaliatory tariff
20% “fentanyl tariff”
105% anti-dumping duty
Although the product underwent forging, heat treatment, and processing entirely in Korea, CBP ruled the shipment Chinese in origin because its steel wire input was sourced from China.
Under previous practice, the U.S. generally recognized the final substantial transformation or assembly location as the country of origin for FTA purposes. However, according to the report, since the inauguration of President Donald Trump, CBP has adopted a much stricter approach, thoroughly scrutinizing upstream supply chains and raw material sources.
Industry experts warn that the stricter interpretation may pose challenges for Korean manufacturers whose supply chains inevitably involve Chinese inputs, potentially triggering widespread tariff exposure.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
