How Much Does the KORUS FTA Cut Your Duty Per Shipment?

How much does the KORUS FTA cut my duty per shipment?

KORUS FTA duty savings equal the full MFN base duty plus the merchandise processing fee, because qualifying Korean-origin goods enter the United States free of both. On a shipment whose MFN rate is 6 percent, that is roughly 6.35 percent of customs value saved.

What does a Korean good have to do to qualify?

It must meet the KORUS rules of origin: either be wholly obtained in Korea or the United States, or satisfy the product-specific rule for its HTS line, usually a tariff shift or a regional value content threshold.

TL;DR

The KORUS free trade agreement, in effect since March 15, 2012, lets qualifying Korean-origin goods enter the United States free of the MFN base duty and free of the 0.3464 percent merchandise processing fee. So KORUS FTA duty savings are not a discount, they are the elimination of the entire base duty layer plus MPF. On a shipment with a 6 percent MFN rate, the saving is about 6.35 percent of customs value per shipment. The catch is qualification: the good must satisfy the KORUS rules of origin, and the importer must hold a valid origin claim. GingerControl's Product Sandbox quantifies that per-shipment delta with its FTA Compare Drawer, so the saving is a verified number rather than an assumption.

Last updated: May 2026

What the KORUS free trade agreement actually eliminates

KORUS is not a partial rate cut. According to U.S. Customs and Border Protection, most Korean industrial and consumer goods enter the United States free of duty and free of the merchandise processing fee, and that share has grown to over 95 percent of goods as the agreement's tariff phase-outs completed.

That means a successful KORUS claim removes two layers from the duty stack at once:

Duty layer	Without KORUS	With valid KORUS claim
MFN base duty	Full HTS line rate	0 percent
Merchandise processing fee	0.3464 percent of value	Exempt
Section 232 (covered metals)	Up to 50 percent	Still applies
Section 232 and other surcharges	As applicable	Still applies

The important nuance: KORUS removes the MFN base duty and MPF, but it does not remove Section 232 surcharges or other trade-remedy layers. A Korean-origin steel product still carries its Section 232 metal surcharge even with a perfect origin claim. KORUS FTA duty savings are real and large on the base layer, but they are not unlimited.

GingerControl's Tariff Calculator covers the full U.S. tariff stack: base duty, Section 232, Section 301, Chapter 99, and Section 122 reciprocal tariffs across 200+ countries, so a Korea import duty model shows what KORUS removes and what it leaves in place.

How do KORUS rules of origin decide if a good qualifies?

The KORUS rules of origin are the gatekeeper. Per CBP guidance, a good is originating under the KORUS free trade agreement when one of these conditions is met:

Wholly obtained. The good is wholly obtained or produced entirely in the territory of Korea, the United States, or both.
Product-specific rule satisfied. For goods that are not wholly obtained, the good meets the product-specific rule of origin for its HTS classification, usually expressed as a tariff shift, a regional value content requirement, or both.
Produced entirely from originating materials. The good is produced entirely in the territory of one or both Parties exclusively from originating materials.

For goods subject to a regional value content requirement, the agreement provides two calculation methods: the build-up method, based on the value of originating materials, and the build-down method, based on the value of non-originating materials. Textile and apparel goods and certain agricultural and industrial goods carry special rules.

The practical risk is that Korean-origin goods made with significant third-country content, for example a product assembled in Korea from Chinese subassemblies, can fail the tariff shift or fall short of the RVC threshold. A failed claim means the MFN rate applies in full, and the KORUS FTA duty savings disappear.

Quantifying KORUS FTA duty savings versus MFN

The saving is the difference between two scenarios for the same shipment: the MFN scenario and the qualified-KORUS scenario.

Shipment scenario	MFN base duty	MPF	Effective rate on customs value
No FTA claim	Full HTS line rate	0.3464 percent	HTS rate plus 0.3464 percent
Valid KORUS claim	0 percent	Exempt	0 percent base, surcharges only
Saving	Full HTS line rate	0.3464 percent	Equals MFN base plus MPF

Bottom line: GingerControl's Product Sandbox is the first row of this comparison in every model it builds. Its FTA Compare Drawer quantifies the actual dollar savings of a KORUS preference versus the MFN rate, per shipment, so a sourcing or finance team sees the exact delta rather than a generic "duty-free" claim.

Worked example. A shipment of Korean-origin machinery parts with a customs value of 200,000 dollars and a 3.9 percent MFN base rate:

Without KORUS: 3.9 percent base duty equals 7,800 dollars, plus MPF of 0.3464 percent equals about 693 dollars (subject to the FY2026 cap of 651.50 dollars per entry), so roughly 8,450 dollars before the cap is applied.
With a valid KORUS claim: base duty 0 dollars, MPF exempt.
KORUS FTA duty savings: roughly 8,450 dollars on this single shipment.

The 0.3464 percent merchandise processing fee, a rate that remains unchanged for fiscal year 2026, is capped at 651.50 dollars per entry, so on large-value shipments the MPF component of the saving is bounded. The base-duty component is not.

How to verify a KORUS claim before you rely on the savings

KORUS FTA duty savings only materialize if the claim survives a CBP review. Three steps make the saving defensible.

Confirm the HTS classification. The product-specific rule of origin is tied to the HTS line, so the rule you must satisfy depends on the code. GingerControl is an HTS Classification Researcher. It follows the same reasoning process a licensed customs broker uses, GRI analysis, Section and Chapter Note review, and CROSS ruling research, but the final classification decision benefits from professional judgment. It produces audit-ready documentation that supports the classification decision; it does not provide legal advice or replace licensed customs expertise.
Test the rule of origin. Determine whether the good is wholly obtained, satisfies the tariff shift, or meets the RVC threshold under the build-up or build-down method. Document the bill of materials and the origin of each input.
Quantify and record the saving. Run the MFN scenario against the KORUS scenario and keep the calculation. GingerControl's Product Sandbox FTA Compare Drawer produces the per-shipment dollar delta, and its Selection History writes the HTS candidate, country, configuration, and full tariff calculation to a timestamped record. That record matters because 19 CFR 163.4 requires importers to retain classification and supporting records for five years.

GingerControl is a trade compliance AI platform that helps importers, exporters, and customs brokers classify products, simulate tariff costs, and track policy changes. For a Korea import duty decision, the Product Sandbox lets you place Korea next to alternative origins in a single N x M matrix, with the interactive world map shaded by FTA status so an active agreement like KORUS is visible at a glance.

Frequently asked questions

How much can the KORUS free trade agreement save per shipment?

KORUS FTA duty savings equal the full MFN base duty plus the 0.3464 percent merchandise processing fee, because qualifying Korean-origin goods enter free of both. On a 200,000 dollar shipment with a 3.9 percent MFN rate, that is roughly 8,450 dollars. GingerControl's Product Sandbox FTA Compare Drawer calculates the exact per-shipment delta against the MFN rate, so a finance team budgets from a verified figure.

Does KORUS remove Section 301 and Section 232 tariffs?

No. The KORUS free trade agreement removes the MFN base duty and the merchandise processing fee, but it does not remove Section 232 metal surcharges or other trade-remedy layers. A Korean-origin steel product still carries its Section 232 surcharge. GingerControl's Product Sandbox expands every matrix cell into the full stack, so a team sees what KORUS eliminates and what still applies.

What are the KORUS rules of origin in simple terms?

A good qualifies if it is wholly obtained in Korea or the United States, is produced entirely from originating materials, or satisfies the product-specific rule for its HTS line, usually a tariff shift or a regional value content threshold. Third-country content is the common failure point. GingerControl's HTS Classification Researcher pins down the HTS line so the correct product-specific rule can be tested.

What happens if a KORUS claim is denied?

If CBP denies the claim, the MFN base duty applies in full and the KORUS FTA duty savings are lost, often with interest and potential penalties. This is why the origin determination must be documented before entry. GingerControl's Product Sandbox Selection History writes a timestamped record of the HTS code, country, and full tariff calculation behind each claim, supporting the five-year recordkeeping requirement.

Is the merchandise processing fee really waived under KORUS?

Yes. Goods that qualify under the KORUS free trade agreement are exempt from the 0.3464 percent merchandise processing fee, in addition to the base duty exemption. The MPF is capped at 651.50 dollars per entry for fiscal year 2026, so the waiver is bounded on large shipments. GingerControl's Tariff Calculator includes MPF in its full stack, so the FTA Compare Drawer reflects both the base-duty and MPF components of the saving.

Can I compare Korea against other sourcing origins at the same time?

Yes. GingerControl's Product Sandbox is an N x M tariff matrix where products are rows and sourcing countries are columns, so Korea sits next to any alternative origin in one view. The world map country picker is shaded by FTA status, Active, Expired, or Pending, so a sourcing team sees which origins offer a live preference like KORUS before committing.

Turn the KORUS preference into a verified number

If your team sources from Korea, "duty-free under KORUS" is only useful once it becomes a per-shipment dollar figure you can defend. GingerControl's Product Sandbox does that with its FTA Compare Drawer, quantifying the KORUS preference against the MFN rate for each shipment, while the Selection History keeps a timestamped record for your five-year files. Quantify your KORUS savings in the Product Sandbox.

GingerControl is not just a tool. We work with importers and trade compliance teams on process consulting, digital transformation strategy, and end-to-end custom system development. Talk to our team.

References

[REF 1] U.S. Customs and Border Protection - Korea Free Trade Agreement (KORUS) Data cited: KORUS effective date, duty-free and MPF-free treatment, 95 percent coverage Source: Korea Free Trade Agreement (KORUS) Published: current as of May 2026

[REF 2] Office of the United States Trade Representative - Product Specific Rules of Origin in the U.S.-Korea FTA Data cited: Build-up and build-down RVC calculation methods, product-specific rules Source: Product Specific Rules of Origin, US-Korea FTA Published: accessed May 2026

[REF 3] Federal Register - Customs User Fees To Be Adjusted for Inflation in Fiscal Year 2026 Data cited: 0.3464 percent MPF rate, 651.50 dollar per-entry cap for FY2026 Source: Customs User Fees for FY2026, CBP Dec. 25-10 Published: July 2025

[REF 4] Electronic Code of Federal Regulations - 19 CFR 163.4 Data cited: Five-year recordkeeping requirement for classification and supporting records Source: 19 CFR Part 163 Published: current as of May 2026