With the investigation still going, the six CEOs were given a Friday, Sept. 20 deadline to respond.
In response, Sunsong dismissed the claims, calling them “unsubstantiated.” However, with the investigation ongoing, the retail companies have been given a deadline of September 20 to provide their responses to Congress. The House Select Committee appears determined to enforce trade rules, specifically the Section 301 tariffs on Chinese auto parts. Depending on the findings, these companies may be compelled to distance themselves from Sunsong.
Sunsong, which applied for a public listing on the Beijing Stock Exchange in 2022, has acknowledged in filings that it relocated production to Thailand to avoid U.S. tariffs on products made in China. According to Sunsong’s own admissions, they partnered with Thailand-based manufacturers to reduce tariff costs imposed on their U.S. subsidiary, Sunsong North America.
For the China Committee, and possibly the Department of Homeland Security, this is the smoking gun of tariff evasion.
The broader issue of trade diversion is not unique to Sunsong. Chinese companies routinely shift production routes to bypass tariffs, undermining U.S. efforts to protect domestic industries. These loopholes weaken U.S. trade policy, rendering tariffs ineffective and putting American jobs at risk.
Sunsong first entered the U.S. market in 2015 by acquiring Harco, a brake hose manufacturer that employs around 100 people. While Sunsong has no manufacturing presence in Mexico, many Chinese auto parts companies are relocating there, encouraged by their American clients, including Ford and Tesla. Sunsong may be next in line to follow this trend.
Since mid-2022, nearly 30 Chinese auto parts manufacturers, along with carmakers like Chery and MG Motors, have announced $7.06 billion in investments in Mexico. Chinese investment in Mexico totaled $14.2 billion in 2022-2023, with almost half of that going to the automotive sector, based on a collection of local news articles and data from J.P. Morgan analysts led by Rebecca Wen. As pressure mounts on Sunsong and other Chinese firms, the likelihood of further relocations grows.
China Auto Parts Giant Sunsong In Crosshairs of House Select Committee
Sunsong, a Chinese multinational automotive parts manufacturer, is now facing serious scrutiny from the House Select Committee on the Chinese Communist Party (CCP). And the attention it’s receiving is far from positive.
On September 6, bipartisan leaders of the China Committee, Chairman John Moolenaar (R-MI) and Ranking Member Raja Krishnamoorthi (D-IL), sent letters to several U.S. auto parts retail companies, including AutoZone, O’Reilly Auto Parts, and Advance Auto Parts, among others. The letters inquired about their business relationships with Sunsong, whose U.S. subsidiary is currently under federal investigation.
Earlier this year, Homeland Security raided Sunsong’s offices in Moraine, Ohio, following allegations of illegal transshipment. Sunsong is suspected of rerouting its China-made products through Thailand to circumvent tariffs imposed on Chinese goods. If true, this practice would undermine U.S. manufacturers and threaten American jobs. The raid underscores the seriousness of the allegations, though details of the investigation remain under wraps.
Sunsong has been accused of taking over market share in the U.S. with tariff-evading imports, a practice not uncommon among Chinese businesses. China consistently faces the highest number of anti-dumping and countervailing duty tariffs globally, a reflection of its aggressive trade practices.
The committee’s letter emphasized the consequences of violating trade laws.
The House Select Committee leaders were joined by Senators Bill Cassidy (R-LA) and Sherrod Brown (D-OH), and Reps. Darin LaHood (R-IL), Glenn Ivey (D-MD), and Ashley Hinson (R-IA) in their letter to the executives. Some of their questions included:
With the investigation still going, the six CEOs were given a Friday, Sept. 20 deadline to respond.
In response, Sunsong dismissed the claims, calling them “unsubstantiated.” However, with the investigation ongoing, the retail companies have been given a deadline of September 20 to provide their responses to Congress. The House Select Committee appears determined to enforce trade rules, specifically the Section 301 tariffs on Chinese auto parts. Depending on the findings, these companies may be compelled to distance themselves from Sunsong.
Sunsong, which applied for a public listing on the Beijing Stock Exchange in 2022, has acknowledged in filings that it relocated production to Thailand to avoid U.S. tariffs on products made in China. According to Sunsong’s own admissions, they partnered with Thailand-based manufacturers to reduce tariff costs imposed on their U.S. subsidiary, Sunsong North America.
For the China Committee, and possibly the Department of Homeland Security, this is the smoking gun of tariff evasion.
The broader issue of trade diversion is not unique to Sunsong. Chinese companies routinely shift production routes to bypass tariffs, undermining U.S. efforts to protect domestic industries. These loopholes weaken U.S. trade policy, rendering tariffs ineffective and putting American jobs at risk.
Sunsong first entered the U.S. market in 2015 by acquiring Harco, a brake hose manufacturer that employs around 100 people. While Sunsong has no manufacturing presence in Mexico, many Chinese auto parts companies are relocating there, encouraged by their American clients, including Ford and Tesla. Sunsong may be next in line to follow this trend.
Since mid-2022, nearly 30 Chinese auto parts manufacturers, along with carmakers like Chery and MG Motors, have announced $7.06 billion in investments in Mexico. Chinese investment in Mexico totaled $14.2 billion in 2022-2023, with almost half of that going to the automotive sector, based on a collection of local news articles and data from J.P. Morgan analysts led by Rebecca Wen. As pressure mounts on Sunsong and other Chinese firms, the likelihood of further relocations grows.
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