Lawmakers are calling for action against Qingdao Sunsong, a Chinese auto parts manufacturer, over allegations of tariff evasion practices that have reportedly harmed American businesses. Chairman Mike Gallagher (R-WI) and Rep. Darin LaHood (R-IL) of the House Select Committee on the Chinese Communist Party have urged Homeland Security Secretary Alejandro Mayorkas to take decisive action against Qingdao Sunsong, citing a pattern of trade fraud and tariff evasion that has had a devastating impact on American manufacturers.
According to the lawmakers, Qingdao Sunsong's tariff evasion has forced a company in Rep. LaHood's district to lay off 25% of its workforce and threatens to permanently shut down operations. In a letter sent to Secretary Mayorkas on September 29, 2023, Chairman Gallagher and Rep. LaHood expressed their concerns over the alleged trade fraud and called for immediate action.
The lawmakers' correspondence to Secretary Mayorkas outlines the allegations against Qingdao Sunsong. The company, along with its U.S.-based subsidiary, Sunsong North America, is suspected of evading Section 301 tariffs by rerouting products via Thailand into the United States and making minimal modifications to mask their true origin. The letter cites Qingdao Sunsong's own public disclosures, suggesting that the firm collaborated with Thailand-based entities to minimize tariff expenses. However, the alterations made to their products in Thailand are believed to fall short of the requirements for a "substantial transformation."
Adding to the gravity of the situation is a commitment from Qingdao Sunsong's controlling shareholder, Wei Zengxiang. He has publicly acknowledged the potential legal consequences and has vowed to personally bear any resulting penalties.
Chairman Gallagher and Rep. LaHood express deep concern about the broader implications of such trade fraud techniques in the current economic environment. They have formally requested a detailed briefing on the issue from the Department of Homeland Security, with a deadline of October 13, 2023. Stakeholders are now eagerly awaiting the response from Secretary Mayorkas and the Department as they navigate this unfolding trade dilemma.
