WASHINGTON, D.C. — Chairman John Moolenaar (R-MI) and Ranking Member Raja Krishnamoorthi (D-IL) of the House Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party sent a bipartisan, bicameral letter to leaders of AutoZone, O’Reilly Auto Parts, Genuine Parts Company, Advance Auto Parts, First Brands Group, and Factory Motor Parts. The letters express concerns that these firms are purchasing products from Qingdao Sunsong—a company based in the People’s Republic of China (PRC)—and its U.S.-based subsidiary currently under federal investigation.
Public reports indicate that federal authorities raided Qingdao Sunsong’s U.S. subsidiary in January. The firm is suspected of illegally transshipping its Made in China products through Thailand into the United States to evade U.S. customs duties, undermine American producers, and eliminate key American manufacturing jobs.
U.S. Senators Bill Cassidy (R-LA) and Sherrod Brown (D-OH), along with Reps. Darin LaHood (R-IL), Glenn Ivey (D-MD), and Ashley Hinson (R-IA), joined the inquiry.
The bipartisan group wrote: “Public company disclosures reveal that U.S. auto part retailers like AutoZone, Advance Auto Parts, and O’Reilly Auto Parts account for more than 40% of [Qingdao Sunsong’s] sales. U.S. retailers are responsible for ensuring their procurement practices do not inadvertently support companies engaged in tariff evasion or other unlawful trade practices. Such practices harm American manufacturers, undermine U.S. policy goals, and reward the Chinese Communist Party (CCP)’s unfair economic policies.”
They continued: “Foreign importers that knowingly falsify the country of origin label on their products are subject to criminal and civil penalties, including significant fines and penalties under 19 U.S.C. § 1592. Companies found complicit in knowingly purchasing unlawfully transshipped products also face serious criminal and civil liability. Given prior congressional efforts to raise concerns about Qingdao Sunsong and the recent DHS raid of its U.S. facility, we are troubled by your company’s continued procurement of its products.”
In light of evidence suggesting these suppliers are purchasing illegally transshipped Chinese products, lawmakers seek answers to several questions:
1. Did your company purchase any products from Qingdao Sunsong before May 10, 2019?
2. How did your company verify Qingdao Sunsong's claimed shift of Country of Origin (COO) from China to Thailand after tariffs were implemented?
3. Did Qingdao Sunsong inform your company it shifted production from PRC to Thailand?
4. Did your company increase purchases from Qingdao Sunsong after various warnings or actions taken against them?
5. Do you plan on increasing purchases from Qingdao Sunsong? Provide detailed accounting since May 10, 2019.
6. Are there other instances where your company engaged with suppliers under investigation for trade fraud?
Additional inquiries include how companies responded to allegations against Qingdao Sunsong; if they requested a COO ruling by CBP; whether supply chain professionals visited Qingdao Sunsong in Thailand; due diligence processes for compliance with trade laws; percentages of COO PRC product purchases versus total purchases in specified years; changes in COO following tariff implementations; detailed descriptions regarding due diligence processes for detecting forced labor-produced goods.
