While European lawmakers are investigating whether Chinese automakers are getting state subsidies that give them an unfair advantage, U.S. authorities have been getting increasingly concerned about a very different strand of China’s auto business, and they’ve just made a significant move in Ohio.
Department of Homeland and Security (DHS) officers raided the premises of Harco Manufacturing Group in Moraine, Ohio, last Thursday, amid an investigation into Chinese manufacturers of auto parts that may be evading import tariffs. Harco was founded in the U.S. in 1976 and made auto components for the OEM market but was bought out by China’s Sunsong Holdings in June 2015.
Sunsong Holdings is a subsidiary of Qingdao Sunsong, located in Qingdao, China, which is one of the country’s largest manufacturers of brake hoses, and also makes power steering, oil cooler, and air conditioning hoses for the global OEM market and aftermarket.
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A DHS spokesperson told Dayton Daily News that the search was “part of an ongoing federal investigation.” The news will certainly please members of the House Select Committee on the Chinese Communist Party, who last September contacted the DHS accusing Qingdao Sunsong of moving some of its production to Thailand to evade 25 percent tariffs that would be applied to goods coming directly from China.
In the letter to the DHS, Rep. Mike Gallagher (R-WI) and Rep. Darin LaHood (R-IL) described Sunsong’s activities as a “case of blatant trade fraud that is having a catastrophic impact on American manufacturers,” Axios reports. They went on to say that “the use of transshipment to evade United States tariffs is a serious violation of U.S. law and undermines American economic and national security.”
Just as it did when news of the EU’s investigation into state subsidies hit, China has responded angrily, accusing the U.S. of trying to “politicize and weaponize” trade issues between the two countries, according to an email received by Axios from the Chinese embassy in Washington, DC.
“China-U.S. economic and trade cooperation benefits both sides. Curbs and protectionism will only disrupt normal trade and destabilize industrial and supply chains,” the spokesperson added. “They do not serve the interests of any party,”