re -estate in South Korea

If “tariff” does not end up being the word of the year, it will be because something very fat happens from now on. The Trump administration has applied a series of Tariffs to practically all countries of the world, with cases as striking as the Gravamen up to 145% to some China products, with 125% response on their part. That is why Chinese sellers are studyingnot very legal lternatives To skip those tariffs and continue selling to the United States. Among those options is the re -labeling of products.

The problem is that South Korea has caught them.

Rehewed. A few days ago, and how can we read in Reutersthe customs authorities of South Korea (KCS) reported on a key discovery: a network of re -labeling of Chinese products. It is a mechanism by which Chinese companies carry their products to South Korea, put a South Korean label instead of the classic ‘Made in China’ and export those products to other countries.

The effect is evident: China has very high tariffs in some products, South Korea not so much (and they have been suspended For three months), so it is an effective tool to skip those US commercial barriers and to continue selling their products in one of its main markets.

The products. Do not think that these are plastic toys or pieces: among what South Korean customs have found are “high value” products. For example, surveillance cameras worth 19.3 billion wones (12.9 million euros) or materials used in batteries worth 3.3 billion wones (2.2 million euros), among others.

As we say, they reached South Korean soil, they were processed minimally or even nothing, they re -rectified as if they were of South Korean origin and were exported to the United States. This is because South Korea is a United States partner with a free trade agreement, so it is a very attractive bridge to avoid tariffs.

Trend. This is nothing new. During the Commercial War that we lived a few years ago (the one that put Huawei in the focus Of all the conflict), Chinese companies already used these tactics to avoid the blockages, labeling their products under “flag” Vietnamese, Malaya or South Korean. The problem is that, as the South Korean customs service indicates, the recent tariffs are having clear effects on this practice.

Only during the first quarter of this year, the country’s customs detected violations of merchandise origin of 29,500 million wones (19.7 million euros) and 97% of them were destined for the United States. To put it in perspective, in all 2024 these violations were estimated at 34,800 of Wones (23.3 million euros), with 62% of those destined for the United States.

Implications. The correlation between the recent tariffs and these re -labeling practices seem clear and the consequence is that South Korea will intensify its activity to intercept these products. So much that they have created a special group to investigate and combat these practices through surprise inspections and a closer collaboration with US authorities.

Now, this practice can damage the reputation of companies that legitimately export their products. It will be the task of the different administrations to ensure the reputation and security of these exports, putting The focus of suspicion against companies that have more opaque supply chains.

Works (they tell North Korea). As we read in EnterpriseSouth Korea is not the only country that would be used as ‘bypass’. In February, it was discovered that some Chinese companies sent their merchandise to Mexico, re -tixed and distributed them in smaller packages and introduced them into US soil. And it is something that simply works.

An example outside the current tariffs is North Korea hair. Basically, there are North Korean companies that import post -haired hair from China, they assemble it to create eyelashes or wigs, they return it to Chinese companies in the form of finished product and it is China that is responsible for distributing that product both inside and outside its market, labeling the product as a fact in China and not in North Korea.

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