Market Update: 6,300 Korean exporters seeking tariff refunds left in limbo – Full Analysis

 

Thousands of Korean exporters may seek refunds after a U.S. court struck down sweeping tariffs imposed by the Trump administration, but uncertainty over how Washington will return roughly $166 billion in duties has left many companies in limbo.

 

One Korean exporter who sells aluminum panels for trailers to the United States paid about $120,000 in tariffs last year.

 


Although importers typically pay tariffs in global trade, the exporter, who asked to stay anonymous, agreed to cover the duties at the request of a U.S. buyer under Delivered Duty Paid, or DDP, terms. When U.S. President Donald Trump’s “reciprocal” tariffs took effect in April last year, the arrangement left the trading firm responsible for the added costs.

 

Now the company hopes a recent U.S. court ruling that struck down
many of Trump’s 
tariffs could allow the exporter to recover nearly 200 million won ($133,000).

 

“It’s not easy to handle the refund procedure directly, so I’m preparing by contacting a customs law firm in Korea that can manage the refund process on my behalf,” the exporter said.

 

 


Tariffs hit 6,300 Korean exporters 

 

The U.S. Supreme Court ruled in February that the Trump administration’s reciprocal tariffs — imposed last year under the International Emergency Economic Powers Act (IEEPA) — were unconstitutional. The decision is expected to trigger refund claims from exporters and importers who paid the duties.

 

But Korean exporters say they remain anxious because U.S. Customs and Border Protection (CBP) has yet to establish a detailed refund process.

 

U.S. President Donald Trump delivers remarks on tariffs in the Rose Garden at the White House in Washington on April 2, 2025. [REUTERS/YONHAP]

 

About 6,300 of the 26,000 Korean companies that exported to the United States last year traded under DDP terms, according to the Korea Customs Service on Friday. That means roughly one in four exporters directly paid the tariffs themselves.

 

The Trump administration imposed a 10 percent reciprocal tariff on Korean goods starting April 5 last year and raised the rate to 15 percent on Aug. 7.

 

Most global trade transactions instead use Free on Board terms, under which the importer assumes responsibility for tariffs. But exporters sometimes accept DDP terms when buyers demand it.

 

Since the reciprocal tariffs took effect, Korean companies say such demands from U.S. buyers have increased sharply.

 

“Buyers want to minimize their tariff burden, so they demand DDP terms, and Korean exporters in weaker negotiating positions have little choice but to accept,” said Park Ju-hyeong, a representative customs broker at customs firm Cusan.

 

The practice is particularly common among small and midsize exporters selling consumer goods such as beauty products and food.

 

Many of those companies rely on Amazon’s logistics service Fulfillment by Amazon, which allows sellers to store products in U.S. warehouses and distribute them domestically, according to Park.

 

“Because the exporter stores products in U.S. warehouses and sells them locally — essentially a consignment model — the exporter ends up paying the tariffs,” he added.

 

 


Refunds hinge on importer status 

 

For now, companies are waiting for guidance from CBP.

 

The agency recently said it would establish a simplified refund system within 45 days, but it has not announced a specific timeline. In documents submitted to the U.S. Court of International Trade, the agency estimated that the federal government could be required to return as much as $166 billion in tariffs collected under the IEEPA.

 

A U.S. Customs and Border Protection Entry Summary form is shown, with the importer of record field circled in red. [U.S. CUSTOMS AND BORDER PROTECTION]

 

Trade experts say exporters should first confirm who is listed as the importer of record on the U.S. import declaration.

 

Even if a Korean exporter paid the tariff, filing a refund claim may prove difficult if the importer of record was registered under the U.S. buyer’s name.

 

“Even under DDP terms, paying the tariff does not automatically grant the right to claim a refund,” an official at the Korea International Trade Association said.

 

Companies may also need to prepare for practical hurdles. CBP announced last month that it will issue refunds only through electronic transfers rather than paper checks, meaning companies without a U.S. business bank account may need to open one.

 

Officials at the Korea Trade-Investment Promotion Agency say “many smaller exporters do not currently maintain such accounts.”

 

Another key factor is whether the customs liquidation process — the final settlement of duties — has already been completed.

 

U.S. Customs typically finalizes liquidation about 314 days after a shipment clears customs. If the process has not yet been completed, companies can file a relatively simple Post Summary Correction (PSC) to request a refund.

 

But once liquidation is finalized, companies must file a formal protest, a process that requires extensive documentation and can take up to two years.

 

The costs also increase sharply. Filing a PSC typically costs between $75 and $250 per case, while protests start at around $2,500. If more than 180 days have passed since liquidation, companies must pursue the matter through litigation.

 

Because U.S. reciprocal tariffs on Korean goods took effect on April 5 last year, shipments from the early months of the policy may already have completed liquidation.

 

In some cases, exporters may try to request an extension of the liquidation deadline.

 

“If a valid reason exists, liquidation can be extended for up to two years in one-year increments,” Park said. “But the authorities can still reject the request, so companies need to prepare for multiple scenarios.”

 

Export-bound cars are lined up at Pyeongtaek Port in Gyeonggi on Feb. 25. [YONHAP]

 

For smaller companies, navigating the refund process alone may prove difficult. Exporters may turn to customs law firms or brokerage services for help navigating the refund process. Exporters can designate third parties, such as customs brokers or clearance agents, to receive refunds on their behalf.

 

Meanwhile, the Trump administration has begun exploring other ways to impose tariffs.

 

Following the court ruling, the United States introduced a temporary 10 percent tariff under Section 122 of the Trade Act. The measure is limited to 150 days and is scheduled to expire in July.

 

The Office of the United States Trade Representative has also opened an investigation under Section 301 of the Trade Act, a step that could lead to new tariffs targeting what the United States describes as unfair trade practices in overseas markets.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.

BY NA SANG-HYEON [[email protected]]