Korea Customs Service Supports Auto Parts Exporters to U.S. with Rules of Origin Compliance

The government is supporting domestic companies exporting automobile parts to the United States in responding to rules of origin requirements.

The Korea Customs Service announced on May 16 that, in collaboration with the Korea Origin Information Center, it has produced and distributed a "U.S. Non-Preferential Rules of Origin Response Checkpoint" guide for companies exporting automobile parts.

The booklet was created and distributed with the aim of assisting domestic automobile parts exporters in responding to rules of origin requirements. This is a follow-up measure to the U.S. administration's imposition of an additional 25% tariff on 130 automobile parts based on the U.S. Harmonized Tariff Schedule (HTS) 4- to 10-digit codes, which has been in effect since May 3.

The United States is the largest export market for Korea's automobile parts industry. The parts subject to the additional tariffs are estimated to account for $15.2 billion in exports from around 2,600 Korean companies last year. Whether a product is subject to the additional tariff can be checked through the "U.S. HTS and Korea HSK Correlation Table for Automobile Parts," which was released by the Korea Customs Service on April 18.

The distributed materials provide a detailed explanation of the "non-preferential rules of origin" with a focus on recent U.S. origin determination cases involving automobile parts such as LED components and electric vehicle charging cables.

The non-preferential rules of origin are a U.S.-specific system applied to recently announced item-specific tariffs and retaliatory tariffs. Unlike systems with clearly defined criteria, this system relies on case-based, qualitative judgments, making it unfamiliar to Korean companies.

In particular, even if products are exported as "Korean origin" under the Korea-U.S. FTA rules of origin, they may be classified as "third-country origin" under the non-preferential rules of origin, which could result in the imposition of high tariffs. Companies are therefore urged to exercise special caution.

The checkpoint booklet produced and distributed by the Korea Customs Service is also available on the agency's website.

Koh Kwanghyo, Commissioner of the Korea Customs Service, stated, "The Korea Customs Service has established a special response headquarters to address U.S. customs administration measures and protect domestic industries, and is making every effort to provide tailored support to companies." He added, "Above all, we will strive to provide practical assistance to domestic exporters in managing non-preferential rules of origin."