Members of the House Select Committee on the Strategic Competition between the United States and the Chinese Communist Party (CCP) sent DHS Secretary Mayorkas a stern letter Friday, asserting that a Chinese firm is committing "blatant trade fraud that is having a catastrophic impact on American manufacturers."
Chairman Mike Gallagher (R-WI) and Rep. Darin LaHood (R-IL) asserts that these companies might be circumventing Section 301 tariffs through transshipment methods involving third countries.
The committee outlines the transshipment method where products, originally manufactured in China, are shipped to third countries and then to the U.S., potentially giving the impression that they were produced outside China. Such practices can have implications under U.S. law, especially when considering the definitions and requirements for substantial transformation in third countries.
Qingdao Sunsong's disclosures from their attempt to list on the Beijing Stock Exchange (BSE) in June 2022 provided insights into their international operations and collaborations with Thailand-based companies, Virayont Group Co. Ltd. and Imperial Cable Industry Co. Ltd. The financial details, as presented in their BSE response, indicate the value addition processes taking place in Thailand which the lawmakers construe as inappropriate.
"After a brief review of Qingdao Sunsong public disclosures and the controlling shareholder's on-the-record comments, the lawmakers quickly determined that Qingdao Sunsong demonstrated a clear pattern of trade fraud that warrants immediate enforcement from Secretary Mayorkas," read a statement.
Wei Zengxiang, the controlling shareholder of Qingdao Sunsong, has assured stakeholders that he would take responsibility for any potential penalties or legal liabilities arising from their trade practices.
"We respectfully request that you provide the Select Committee with a briefing on how the Department is investigating and seeking redress from these perpetrators as soon as possible but no later than October 13, 2023," the lawmakers wrote.
Nearly three in four DHS employees – more than 185,000 people – would be required to continue working through a shutdown, without receiving a paycheck. Those working without pay include law enforcement officers, analysts, investigators, and disaster response officials, according to a Department statement.
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