In a bipartisan effort, key members of the U.S. House Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party (CCP) have launched an inquiry into major auto parts retailers. Chairman John Moolenaar (R-MI) and Ranking Member Raja Krishnamoorthi (D-IL) spearheaded this initiative, sending letters to the leaders of prominent companies including AutoZone, O’Reilly Auto Parts, Genuine Parts Company, Advance Auto Parts, First Brands Group, and Factory Motor Parts. The central concern revolves around these firms’ procurement of car parts potentially linked to illegal trade practices and sourced from Qingdao Sunsong, a Chinese company.
The lawmakers’ letters highlight serious allegations against Qingdao Sunsong and its U.S.-based subsidiary, which is currently under federal investigation. Public reports indicate that a recent raid by federal authorities on Qingdao Sunsong’s U.S. branch suggests the company may be engaged in illegally transshipping products made in China through Thailand. This alleged scheme is suspected to be an attempt to evade U.S. customs duties, gain an unfair advantage over American producers, and negatively impact manufacturing jobs within the United States.
Joining Chairman Moolenaar and Ranking Member Krishnamoorthi in this congressional inquiry are U.S. Senators Bill Cassidy (R-LA) and Sherrod Brown (D-OH), along with Representatives Darin LaHood (R-IL), Glenn Ivey (D-MD), and Ashley Hinson (R-IA), demonstrating the widespread bipartisan concern over this issue.
In their letters, the lawmakers emphasized the significant role of U.S. auto part retailers in Qingdao Sunsong’s sales. “Public company disclosures reveal that U.S. auto part retailers like AutoZone, Advance Auto Parts, and O’Reilly Auto Parts account for more than 40% of [Quingdao Sunsong’s] sales,” the letter states. This dependence places a responsibility on these retailers to ensure their sourcing practices do not inadvertently support companies involved in tariff evasion or other illicit trade activities. Such practices, the lawmakers argue, not only harm domestic manufacturers but also undermine U.S. policy objectives and reward the CCP’s unfair economic practices. The focus on “Ccp Car Parts” sourcing underscores the broader concerns about the influence of the Chinese Communist Party in international trade and its potential impact on American businesses.
The inquiry further points out the legal ramifications for companies involved in such practices. Knowingly falsifying country of origin labels carries both criminal and civil penalties, including substantial fines under U.S. law (19 U.S.C. § 1592). The lawmakers stress that companies found to be complicit in purchasing unlawfully transshipped goods also face serious legal liabilities. Given previous congressional warnings regarding Qingdao Sunsong and the recent DHS raid, the continued procurement of products from this company by U.S. retailers is particularly troubling to the committee.
To address these pressing concerns, the bipartisan group of lawmakers has posed a series of detailed questions to the auto parts retailers. These questions aim to uncover the extent of the retailers’ relationship with Qingdao Sunsong, their due diligence processes, and their response to the allegations of illegal transshipment. The inquiries include:
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Pre-Tariff Purchases and Origin Verification: Lawmakers are seeking to understand if the companies purchased products from Qingdao Sunsong before the imposition of 25% tariffs on automotive parts from China in May 2019. They are also asking how the retailers verified Qingdao Sunsong’s claim of shifting its Country of Origin from China to Thailand after the tariffs were implemented.
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Purchase Increases and Awareness of Investigation: The letters question whether the retailers increased purchases from Qingdao Sunsong after the 2019 tariffs, following a congressional warning in September 2023 about potential illegal transshipment, or after the DHS raid in January 2024. Retailers are also asked about future purchasing plans from Qingdao Sunsong and to provide a detailed account of procurement since May 2019.
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Response to Transshipment Allegations: Lawmakers are inquiring about the retailers’ specific responses to the allegations against Qingdao Sunsong and the ongoing DHS investigation. This includes whether they requested a Country of Origin ruling from CBP and if their supply chain professionals visited Qingdao Sunsong’s Thailand facility to verify the origin of purchased products.
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Supply Chain Due Diligence: The inquiry delves into the retailers’ due diligence processes to ensure compliance with U.S. trade laws. Specifically, they are requesting data on the percentage of products purchased from China in 2019 and 2023, and what percentage of their Chinese product supply shifted origin after the 2019 tariffs.
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Forced Labor Prevention: Finally, the lawmakers are seeking a detailed description of the companies’ due diligence processes to prevent the procurement of goods produced with forced labor, in accordance with the Uyghur Forced Labor Prevention Act.
These letters and the questions they pose underscore the serious concerns in Washington regarding the sourcing of “ccp car parts” and the need for robust supply chain oversight to prevent illegal trade practices and protect American economic interests. The responses from these major auto parts retailers will be closely watched as they could have significant implications for the industry and the broader trade relationship between the U.S. and China.
Read the lawmakers’ letter to AutoZone HERE.
Read the lawmakers’ letter to O’Reilly Auto Parts HERE.
Read the lawmakers’ letter to Genuine Parts Company HERE.
Read the lawmakers’ letter to Advance Auto Parts HERE.
Read the lawmakers’ letter to First Brands Group HERE.
Read the lawmakers’ letter to Factory Motor Parts HERE.
