Washington, Aug 13 (IANS) A Republican senator has urged the US Department of Homeland Security to crackdown on illegal transshipment schemes that he said allow Chinese manufacturers to conceal the origin of goods and evade American tariffs.
Senator Bernie Moreno of Ohio made the appeal in a letter to Homeland Security Secretary Markwayne Mullin. He said the practice costs the United States billions of dollars in tariff revenue and threatens domestic manufacturing jobs, particularly in the automobile industry.
“Illegal transshipment is a deliberate scheme by foreign manufacturers, overwhelmingly based in the People’s Republic of China, to falsify where their goods are made, launder them through a third country, slap on a new label, and dump them into the American market, eluding tariffs and other duties imposed on the true country of origin,” Moreno wrote.
“Every one of these shipments represents a company breaking American law and stealing competitive advantage from American businesses,” he said.
Moreno cited trade data showing a record USD 112 billion gap between goods China reported exporting to the United States and those recorded by US Customs and Border Protection as arriving in the country last year.
He said the discrepancy could mean that as much as one-quarter of everything China shipped to the United States last year escaped tariff enforcement.
“This sustained act of trade fraud against the American economy is costing taxpayers billions in lost revenue and threatening law-abiding American businesses and the jobs they provide,” Moreno wrote.
The senator said the issue had serious implications for Ohio. The automobile industry supports more than 329,400 jobs in the state and contributes USD 41.43 billion to its gross state product, according to the letter.
Moreno pointed to a January 2024 federal search at the Moraine, Ohio, plant of Harco Manufacturing Group, the US subsidiary of Chinese auto parts manufacturer Qingdao Sunsong.
Homeland Security Investigations executed the search warrant. Congressional investigations had previously identified Qingdao Sunsong over allegations that it circumvented Section 301 tariffs.
Those investigations alleged that the company moved products through Thailand, where they underwent limited transformation, before shipping them to the United States.
“This is what illegal transshipment looks like: Chinese companies setting up shadow operations in other countries to cheat U.S. trade laws while American businesses play by the rules,” Moreno wrote.
The senator said he supported the Trump administration’s tariff policy but warned that duties would be effective only when collected and enforced without exception.
He acknowledged the department’s use of artificial intelligence to improve supply-chain visibility, its Enforce and Protect Act investigations and the work of Homeland Security Investigations’ Global Trade and Investigations division. He also urged the department to determine whether it needed additional powers to pursue tariff evaders.
Section 301 of the Trade Act of 1974 permits the United States to respond to foreign trade practices it considers unfair or discriminatory. Washington imposed several rounds of Section 301 tariffs on Chinese products during President Donald Trump’s first term.
–IANS
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