S Korea, Vietnam clamp down on illegal transshipment, origin fraud amid US talks

SINGAPORE (ICIS)–South Korea and Vietnam are stepping up efforts to clamp down on illegal transshipments of goods to the US from third countries, amid US concerns that third-country shipments are being used to circumvent tariffs imposed on China.

The Korea Customs Service has established an investigation team to crack down on illegal transshipments to align with US tariff policies, it said in a statement on 21 April.

145% tariffs on China by the US has led to suppliers seeking to move trade elsewhere, but cases of origin fraud were detected South Korea.

The agency identified multiple cases where Chinese goods were transshipped through South Korea, falsely labeled as Korean-made, and exported to the US to evade high tariffs, including anti-dumping duties, the statement said.

It highlighted 75% of detected cases in early 2025 involving exports to the US, with a focus on high-value goods, particularly batteries and raw materials, used in production and export.

One highlighted case involved a Chinese-established company in South Korea for the import of 1.2 million Chinese-made batteries, valued at Korean won (W) 74 billion that were falsely labelled as Korean-made.

Meanwhile, Vietnam’s Ministry of Industry and Trade (MOIT) issued a directive on 15 April focusing on strengthening the management of goods’ origin to counter fraud and protect the country’s reputation as an exporter, the government website reported.

It highlighted more stringent checks at customs to comply with free trade agreement (FTA) origin criteria, maintain trade benefits, and avoid anti-dumping or anti-subsidy investigations.

Strict penalties will be issued to those that attempt to circumvent tariffs via illegal transshipments and origin fraud, the directive stated.

Vietnam has been slapped with 46% “reciprocal” tariffs by the Trump administration, while South Korea received 25% tariffs, with both currently paused until early July.

Both countries are currently engaging in urgent talks with US trade representatives as the tariffs threaten to harm global economic growth significantly.

South Korea’s GDP contracted by 0.1% year on year in the first three months of 2025 amid political chaos and a trade war between the US and China, the Bank of Korea (BoK) said on Thursday.

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