The air in the Incheon customs office was thick with a nervous energy. It was late April 2025, and the fallout from U.S. President Donald Trump’s latest tariff blitz was beginning to materialize in unexpected ways. Lee Kwang-woo, the usually unflappable investigation planning director at the Korea Customs Service (KCS), leaned back in his chair, the data from the first quarter starkly displayed on the monitor before him.
“Twenty-nine point five billion won,” he murmured, the Korean currency figure feeling heavy on his tongue. That was the value of goods flagged for country-of-origin violations in just the first three months of the year, a staggering 97% of it destined for the United States. It dwarfed the 34.8 billion won for all of the previous year, where U.S.-bound shipments accounted for a smaller 62%. The pattern was clear, and it pointed directly to Beijing.
Trump, barely three months into his second term, had wasted no time in reigniting the trade tensions that had defined his first presidency. Tariffs on Chinese goods, already substantial, had climbed further since February. South Korea, a long-standing U.S. ally with a free trade agreement, was now finding itself an unwitting pawn in this global economic game. Just this month, a 25% tariff had been slapped on South Korean goods heading stateside, a move that sent shockwaves through Seoul before being temporarily suspended. Meanwhile, the tariffs between the U.S. and China had ballooned to a crippling 145%, effectively strangling direct trade.
The KCS had anticipated this surge in circumvention attempts. Lee remembered the similar patterns during Trump’s first term. This time, they had been proactive, launching a special probe early in the year. The results were alarming.
One case stood out: 3.3 billion won worth of cathode materials, the lifeblood of electric vehicle batteries. Imported cheaply from China, they were being fraudulently relabeled as “Made in Korea” before being shipped to the U.S. The motive was clear: to bypass existing tariffs on Chinese battery components, even before Trump’s latest levies had fully taken effect in January.
Another, even larger operation involved surveillance cameras. A staggering 19.3 billion won worth of components had arrived from China, only to be hastily assembled in South Korean factories and then re-exported to the U.S., masking their true origin to evade restrictions on Chinese communication devices. Some of these illicit shipments were already on their way across the Pacific, while others languished in the bustling ports, waiting for their false papers to clear.
“They see us as a backdoor,” a frustrated customs agent had muttered during one of the briefings. “A clean label to bypass the tariffs.”
Lee understood the implications. While direct trade figures between the U.S. and China might show a decline, the actual flow of goods wasn’t necessarily decreasing. It was simply being rerouted, laundered through countries like South Korea. The total volume of goods moving from China to the U.S., albeit indirectly, was likely to increase as these sophisticated schemes took hold. South Korean ports, initially bustling with legitimate trade, were now becoming unwitting conduits for tariff evasion.
That very morning, Lee had sat across from U.S. customs officials, the tension in the room palpable. The Americans were concerned, their data mirroring the anomalies South Korea was uncovering. Joint investigations were underway, a fragile alliance formed out of necessity to combat this illicit trade.
The KCS had already established a special task force, dedicated to unraveling these intricate webs of deception. More stringent inspection protocols were being implemented, and legal measures were being prepared for the companies involved. The discovered violations would soon be in the hands of prosecutors.
Lee looked out at the sprawling port, the cranes like giant metal insects against the horizon. He knew this was just the beginning. As long as the massive tariffs remained, the incentive to find ways around them would only grow stronger. The intricate dance of global trade was becoming increasingly complex, with countries like South Korea caught in the middle, struggling to maintain the integrity of their own trade while navigating the turbulent waters of a U.S.-China trade war. The headline he’d read that morning echoed in his mind: “Indirect Trade Set to Rise as Nations Evade Tariffs.” It wasn’t just a prediction; it was a stark reality unfolding right before his eyes.
All names of people and organizations appearing in this story are pseudonyms
South Korea finds ‘Made in Korea’ breaches intended to bypass U.S. tariffs
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