LaHood, colleague call for DHS briefing on U.S. tariff evasion

U.S. Rep. Darin LaHood (R-IL) recently made a bipartisan request that the U.S. Department of Homeland Security (DHS) provide the Select Committee on China with a briefing on how the department is investigating and seeking redress from foreign companies involved in trade fraud against the United States.

Specifically, Rep. LaHood and House Select Committee on the Chinese Communist Party Chairman Mike Gallagher (R-WI) urged DHS Secretary Alejandro Mayorkas to take action against Qingdao Sunsong, a Chinese auto component manufacturer that they say has committed a pattern of trade fraud and tariff evasion.

“Reviews of Qingdao Sunsong’s public disclosures lay out a case of blatant trade fraud that is having a catastrophic impact on American manufacturers, wrote Rep. LaHood and his colleague in a Sept. 29 letter sent to Mayorkas.

They pointed out that Qingdao Sunsong, a company based in the People’s Republic of China, and its U.S.-based subsidiary, Sunsong North America, are circumventing Section 301 tariffs by transshipping their products with limited transformation through Thailand to the United States. 

“The use of transshipment to evade United States tariffs is a serious violation of U.S. law and undermines American economic and national security,” the members wrote. “To evade Section 301 tariffs and duties, many PRC companies — including Sunsong — ship their Made in China products to countries that do not face tariffs at the same level as those imposed on the PRC by the United States. 

“Without fundamentally transforming the product, these companies will then ship their Made in China products to the United States under the guise that the products were made in a country other than China,” they wrote.

Rep. LaHood and his colleague also wrote they are concerned that this type of trade fraud is commonplace in today’s economic environment and that companies are engaging in these practices to effectively evade the U.S. tariff regime. 

They requested that Mayorkas provide the select committee with a briefing as soon as possible but no later than Oct. 13.