“Fake In USA” Is Yet Another Blow to American Manufacturers, Workers, and Taxpayers

Foreign companies that circumvent international trade agreements and evade sanctions by disguising their products as “Made in USA” harm American manufacturers, workers, and taxpayers.

Case Studies

QINGDAO SUNSONG

"Qingdao Sunsong, a Chinese auto parts manufacturer with a distribution center in Moraine, Ohio, has been employing a bold strategy to circumvent country of origin rules and evade U.S. tariffs. The company has been channeling its Chinese-made parts through Thailand, presenting them as substantially transformed within Thailand's borders. By doing so, Sunsong manages to sidestep the payment of U.S. tariffs.

Interestingly, Sunsong's schemes were inadvertently revealed through its public filings with the Beijing Stock Authority. As Sunsong’s legitimacy in the dealings involving Thailand came under scrutiny, the company unintentionally disclosed data that laid bare its deceptive tactics.

TAPP calls upon U.S. auto part retailers to review the propriety of this transshipment issue and, where appropriate, reconsider their ongoing relationship with Sunsong. Furthermore, TAPP calls upon U.S. officials to uphold tariff and origin laws, ensuring a fair and transparent trading environment.

You can read more about this case HERE.

HONG KONG

The fact that China and Russia have been allies throughout the Russian invasion of Ukraine is no secret. However, Hong Kong is another a major player in the Russian invasion of Ukraine that generally flies under the radar. Hong Kong has been acting as a transshipment port for “diverting Western-made microelectronic components to companies affiliated with the Russian military.”

In March of this year, the Department of Justice released a brief that specifically mentioned Hong Kong as a hotbed for the illegal transshipment of products coming from Russia and Belarus.

Certain transactions that Hong Kong and Russia have been involved in, such as product redirection and transshipping, violate U.S. export laws. Through a special task force, U.S. Department of Justice has started to issue sanctions against companies and individuals that have violated export laws.

Despite this, Russia has continued to add millions of dollars to its war chest from companies whose products are unknowingly diverted to Russia.

Certain bad actors in Hong Kong are working with Russia and are actively subverting U.S. sanctions. U.S. government officials should be appalled at this news because of the damage it is inflicting on Ukraine and because of the blatant disregard for U.S. laws.

TAPP encourages the U.S. government to continue investigating and punishing foreign agents that break laws, ensuring that U.S. sanctions and trade laws are followed and that U.S. interests are preserved across the globe.

ARATOS GROUP

Aratos Group is a Netherlands and Greece-based defense company whose president and CEO has been arrested for wire fraud and faces other allegations of smuggling U.S. technology into Russia.

U.S. government agencies including the FBI are currently investigating Aratos’ actions, as it is alleged that the company was acting as a procurement agent for Russia, sending sensitive U.S. technology to Russia to aid in the war effort. Aratos claimed to be using the U.S. technology themselves, but the products were reshipped and sent to Russia.

Smuggling U.S. technology into Russia is a national and international security threat. This alleged violation of U.S. sanctions and trade law cannot be tolerated. The U.S. government must find a way to crack down on foreign entities that break U.S. laws.

 Why It Matters

When foreign companies contract with the U.S. it means that their products are paid for by U.S. tax dollars. American manufacturers, workers, and taxpayers who play by the rules are damaged when foreign companies abuse U.S. trade and tariff laws.

Foreign companies who break U.S. laws are a national security threat. National security concerns are raised when foreign companies illegally ship sensitive technology to foreign countries that are hostile to the U.S., especially during wartime. The U.S. must uphold trade and tariff laws internationally to preserve security interests domestically.

“Fake In USA” flies in the face of what the Trade Alliance to Promote Prosperity supports—free and fair trade. Therefore, the Trade Alliance to Promote Prosperity is calling on U.S. policymakers to require transparency in government contracting, and we are also calling on contracting authorities in federal and state agencies to confirm the original sources of the equipment they purchase with tax dollars.

No Fake In USA!

Q&A

  • “No Fake In USA” is a grassroots effort to demand transparency and truth from companies importing products into the United States. Foreign companies that dupe American consumers and officials into purchasing their products and companies that evade tariffs must be held accountable. The Trade Alliance to Promote Prosperity is calling on policymakers to strengthen country of origin and tariff laws and penalties for disguising foreign products as “Made in USA.”

  • Policymakers must be made aware that foreign companies are gaining access to U.S. markets and security infrastructure. Countries gaining illicit access to our markets and security infrastructure must be exposed and stopped.

  • U.S. government officials need to know that you care about the importation of products masquerading as “Made in USA” when the products are, in fact, manufactured abroad. Foreign companies that cheat American government officials and individuals who evade tariff laws through illegal trade schemes must be held accountable. Tell them No Fake In USA!