South Korea IEEPA Tariffs: 10% Rate with KORUS FTA Complexity
South Korea received the 10% IEEPA baseline rate effective April 5, 2025. However, South Korea has a bilateral free trade agreement with the United States — the KORUS (Korea-United States) Free Trade Agreement — which provided preferential treatment for many Korean-origin goods. KORUS-qualifying goods that entered duty-free paid $0 in IEEPA duties and are not refundable.
This makes South Korea’s CAPE situation analogous to Canada and Mexico: you must review each entry to determine whether IEEPA duties were actually assessed.
KORUS FTA and IEEPA Interaction
The KORUS FTA, in force since 2012, eliminated duties on most U.S.-Korea trade. Korean-origin goods that meet KORUS rules of origin (principally, that they were substantially produced in Korea with sufficient Korean content) are eligible for preferential treatment.
When IEEPA tariffs were imposed in April 2025, the executive orders set the 10% IEEPA rate for Korea but maintained KORUS preferential treatment for qualifying goods. In practice:
- KORUS-qualifying goods: Entered duty-free under KORUS, paid $0 IEEPA, not refundable
- Non-KORUS-qualifying goods: Paid 10% IEEPA rate, eligible for CAPE refund
Key Korean Export Categories
Semiconductors and Electronics: South Korea is a global leader in semiconductor manufacturing (Samsung, SK Hynix) and consumer electronics (LG, Samsung). Goods with high Korean domestic content typically qualify under KORUS.
Automotive Vehicles and Parts: Hyundai, Kia, and their suppliers export significantly to the United States. KORUS has specific rules for automotive goods. Many Korean vehicle components qualify under KORUS; some may not depending on content.
Steel and Aluminum: Note that Section 232 tariffs separately affect Korean steel and aluminum (with country-specific exemptions that shifted during 2025). Steel/aluminum duties are separate from IEEPA.
Chemical Products: Korean chemical exports to the United States span a range of categories.
How to Check KORUS Status on Your Entries
On your CBP Form 7501, look for the Special Program Indicator field. A “KR” indicator or similar notation signifies a claim for KORUS preferential treatment. Entries with KORUS indicator showing $0 IEEPA duty are not eligible for CAPE.
Entries without KORUS indicator, or where KORUS preference was not claimed, may show the full 10% IEEPA rate. These entries are refundable.
Filing Recommendations
Given the KORUS complication, Korean-origin entries require careful review before CAPE filing. Work with your customs broker to filter your Korean entry set to those with positive IEEPA duty assessments. Only include those entries in your CAPE CSV.