Are Tariff Changes Challenging K-pop's Merchandise Trade?

The U.S. and European Union have dismantled primary customs exemptions for low-value imports, pushing cross-border retailers to reevaluate how they ship goods. For South Korea's entertainment sector, including K-pop, the changes could potentially force the companies to realign their fulfillment strategies centered around direct merchandise sales to overseas fans.

U.S. and EU Tighten Low-Value Import Rules

The shift began in the U.S. on Aug. 29, 2025, when the government ended duty-free treatment for commercial imports valued below $800 USD, expanding on a previous crackdown on low-value shipments from China and Hong Kong to imports from all countries, reportedly including South Korea. 

The new policy has triggered an increase in customs formalities for low-value shipments, with final import costs still depending on product classification, customs valuation, shipping method, and applicable trade rules.

The European Union (EU) has simultaneously followed a similar trajectory. Since July 1, 2026, it removed the customs duty exemption for parcels valued below €150 (~ $171). Currently, they have introduced a temporary €3 (~ $3.4) customs duty per qualifying shipment, as broader customs reforms are gradually implemented. The European Commission said the steps are designed to modernize customs administration as cross-border e-commerce expands with each passing day.

The policy changes align with rapid growth in international e-commerce. The European Commission estimates nearly 5.9 billion low-value imported items entered the EU in 2025, accounting for almost 98% of all imported items processed by customs.

A New Challenge for K-pop’s Direct-to-Fan Model

Nevertheless, these changes arrive after years of growth in K-pop's direct-to-consumer merchandise business. Large entertainment companies set up global storefronts that enabled fans to pre-order albums, photocards, apparel, light sticks and limited-edition collectibles directly from South Korea. 

For instance, BTS-label HYBE, EXO-label SM Entertainment, GOT7-label JYP Entertainment and BIGBANG-label YG Entertainment now operate proprietary platforms like Weverse Shop, SMTOWN &STORE, JYP SHOP and YG SELECT, respectively. Additionally, HYBE has also grown its Weverse Shop with global shipping and concert venue pickup.

Logistics Shift Toward Regional Fulfillment?

As per many industry experts, the loss of low-value import exemptions increases both costs and paperwork for single-package overseas shipments. This makes the option of bulk freight, or the idea of regional fulfillment hubs, far more attractive and cost-effective to many businesses than shipping orders individually from their South Korean warehouses.

Interestingly, other cross-border retailers have already begun adjusting to this shift. Companies like Shein and Temu have expanded local warehousing and fulfillment operations to navigate stricter customs rules, providing a model that merchandise-focused industries like K-pop could follow.

New U.S. Forced-Labor Tariffs Add Another Layer of Pressure

The shifting trade landscape now extends well beyond low-value import rules. On July 23, 2026, the Office of the U.S. Trade Representative finalized tariffs of 10% to 12.5% on imports from 60 trading partners, including South Korea. The measure reportedly followed after the U.S. determined that these economies had inadequate enforcement against goods made with forced labor. The action, which was taken under Section 301 of the Trade Act, took effect as a temporary 10% global tariff, set under Section 122, expired the same week.

The measures are not directed particularly at the K-pop merchandise sector. However, they could trigger a surge in compliance obligations for Korean exporters shipping consumer goods to the U.S. Sectors like apparel, cotton and cotton goods, footwear, seafood, and industrial materials like copper, aluminum and steel, are presumed to be high-risk industries, where forced labour prevails. Since K-pop merchandise often includes apparel, bags, accessories, and other consumer goods, entertainment companies may possibly face closer checks on their suppliers and where their materials come from.

K-pop Companies Face an Adaptation Test

Taken together, tighter low-value import rules and heightened supply-chain compliance requirements are reshaping the economics of cross-border merchandise trade. While major listed K-pop (and other K-entertainment) companies have not publicly identified these policy changes as a material financial risk, they could face growing pressure to balance cost, regulatory compliance and delivery efficiency. As global merchandise demand continues to expand, such policy shifts could test how companies exporting South Korean cultural exports can adapt to the updated global logistics networks without disrupting the economics of direct-to-fan merchandise sales.