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Editor’s note: This sponsored article was produced on behalf of Aprio as part of the firm’s partnership with Global Atlanta. Jay Cho will provide remarks at an upcoming supply chain and trade forum Aprio is hosting April 30: From Shocks to Shifts: Shoring Up Supply Chains in an Age of Trade Turbulence
Foreign-based companies coming to Georgia to supply Korean electric-vehicle and clean-energy giants like Hyundai, Kia and SK Battery must have strong import compliance procedures in place – even before they begin any manufacturing, says Jay Cho, who heads up Aprio LLP’s International Tax – Customs and Tariffs Practice.
Hyundai’s new electric vehicle Meta Plant near Savannah is the latest of several multi-billion-dollar Korean investments in Georgia.
And there is no shortage of Korean and other suppliers coming to the state to service the plant and its joint-venture battery facility with LG, plus other new manufacturing ventures in the state, Mr. Cho asserts.
These suppliers would do well to consult with Aprio’s advisors, Mr. Cho says, because although their products may be used by larger companies, the smaller importers are the key processors of the imported materials, so they are responsible for customs and tariffs.
His advice to small- to medium-sized suppliers is to make sure their internal import-export compliance procedures include strong customs broker or freight forwarder communications and management policies, as compliance issues tend to arise from broker mistakes.
Miscommunication caused one Korean client that imports raw materials for EV batteries from China to be charged additional anti-dumping duties on its merchandise.
Aprio’s investigations found that the product was actually outside of the scope of anti-dumping rules, so no additional duties should have been imposed. The client’s broker also made the mistake of applying a 25-percent China tariff even though the product was not subject to that tariff. Mr. Cho’s practice helped the client remove the erroneous tariffs, claim refunds and file a petition to mitigate penalties.
“The client was happy because they ended up getting more money back instead of paying penalties,” he notes.
Aprio opened the Customs and Tariffs Practice in 2023 to serve the many manufacturing, electronics, automotive and other clients who were asking for advice on supply chain issues and import-export compliance.
“From the get-go, we want to make sure that our clients are fully aware of their import compliance situations so we can assist them not only in maintaining a smooth supply chain and sourcing of their parts or finished products but also in identifying duty-saving options,” Mr. Cho says. He adds that Aprio’s proactive mitigation also helps clients protect their brand reputation, as it allows them to avoid delays in their shipments.
Mr. Cho attributes many successful customs cases to his identification with Korean clients.
“We speak over 60 different languages on our team. I speak Korean, so I know the clients’ culture and their expectations. We can closely work with them and their agents, which are often also Korean companies,” he says.
Georgia is home to more than 100,000 residents of Korean descent – the third-largest Korean population in the United States – thanks in part to increasing Korean investment that began some 15 years ago with the Kia plant in West Point.
Korean investment took off in 2018 with the announcement of the SK On $2.6 billion battery factory in Commerce. Since then, Korean investment in Georgia has grown to some $23.6 billion, including the massive Hyundai and Kia investments as well as the $2.5 billion Q CELLS solar panel factory in Dalton, which is expected to supply 30 percent of total U.S. solar panel demand by 2027.
These significant Korean developments underscore the importance of Aprio’s customs and tariffs services for incoming suppliers throughout Georgia. Korean suppliers will also benefit from Aprio’s Korean Practice that is dedicated to serving the tax consulting needs of Korean companies and individuals.
Mr. Cho’s practice works closely with Korean organizations, like the Korean-American Chamber of Commerce GA-ATL, the Southeast U.S. Korean Chamber of Commerce (SEUSKCC) and the Korea Trade-Investment Promotion Agency (KOTRA) to reach out to Korean companies in Georgia and beyond.
In addition to Korean investors, Mr. Cho’s clients include foreign-based firms with multinational operations across the globe. Some of these are opening manufacturing or distribution hubs in the U.S., often to take advantage of free trade agreements like the United States-Mexico–Canada Agreement, he says.
Companies that trade under FTA regulations may actually face a higher risk of audit by customs authorities, Mr. Cho notes. They are also subject to local government rules in the partner countries. Additionally, U.S. Customs can use trade policy tools to target certain industries, countries and products, charging additional tariffs on goods, even if those goods are duty-free under the FTA. Aprio helps clients navigate these challenges.
“We ensure that clients comply with complex customs rules whenever they import raw materials or their main products into the U.S. for further manufacturing and distribution,” Mr. Cho says.
He adds that various U.S. agencies enforce strong export control rules, so companies must be diligent. “There are different types of regulations that they need to consider before even shipping their products.”
Aprio consults clients about shipments to different jurisdictions and works with tax experts in local markets to help clients achieve smooth supply chains, Mr. Cho asserts. His practice’s good relationships with local customs authorities make the process easier and more efficient.
In Georgia, the growth of Korean investment is “a great phenomenon,” Mr. Cho says. “I see a lot of opportunities from a customs perspective.”
Learn about Aprio’s Customs and Tariffs Practice.
