The Issue
Chinese companies that break U.S. laws undermine the integrity of America.
American companies are being put out of business due to the inflow of cheap, heavily subsidized products promoted by the Chinese Communist Party’s aggressive, state-sponsored economic program.
Every day, American companies face increasingly steep competition from China. The Chinese Communist Party (CCP) heavily subsidizes companies in industries important to China’s economic domination. These companies can afford to sell their products at a very cheap price and squeeze out American competition. It is difficult for American companies to compete under normal circumstances, but when Chinese companies break U.S. trade laws, it’s nearly impossible.
In response to the Chinese subsidies, the United States has imposed tariffs on many Chinese products. This has created an incentive for Chinese companies to break and evade U.S. trade laws by several innovative and underhanded means, including transshipping, reimporting and roundtripping, tariff jumping, and two-stepping. Sometimes these practices are layered onto other alleged unethical practices (e.g., forced prison labor).
The following case studies show how the business practices of two Chinese companies raise important questions about tariff integrity, the impact of these practices on American businesses, and the government’s ability to defend American businesses against such practices.
Why It Matters
American companies are being put out of business due to the inflow of cheap, heavily subsidized products promoted by the CCP’s aggressive, state-sponsored economic program. The U.S. government-imposed Section 301 tariffs to help level the playing field, but so many Chinese firms are not afraid to flout them by “finishing” their products in Southeast Asia and the American tool manufacturing industry by skirting the law and other tricky maneuvers.
The American automotive aftermarket is at stake, and effective regulation and enforcement is needed at both the government and corporate levels. The long-term impact of businesses that are forced to close will be higher prices and a complete lack of supply chain control on mission-critical parts (automotive replacement parts) and tools.
If action isn’t taken, stakeholders in the entire U.S. supply chain (manufacturers and suppliers) will be at risk of losing jobs, and the U.S. auto aftermarket and tool manufacturing industry will be beholden to the interests of foreign governments. Americans cannot put faith in foreign governments to ensure that companies operating under their purview are following the rules and regulations that the American government put in place.
Solidarity at government and industry levels must occur if we hope to save American businesses and, ultimately, the American consumer.
Where tariffs are put in place, they should be respected or repealed—but not flouted. American rule of law must mean something. We must have tariff integrity.
Note on Research
Tariff Integrity constantly engages in research to update the accuracy of its content. Periodic changes to the content of the website reflect its most recent research.
What You Can Do to Help
Ask U.S. Trade Representative Katherine Tai to crack down on China and to fight for tariff integrity.