Republican Senator Bernie Moreno of Ohio has called on the US Department of Homeland Security to dismantle illegal transshipment schemes that, he argues, allow Chinese manufacturers to disguise the origin of their goods and systematically evade American tariffs. In a formal letter addressed to Homeland Security Secretary Markwayne Mullin, Moreno warned that the practice is draining billions of dollars in tariff revenue and imperilling domestic manufacturing employment.

The Scale of the Problem

Moreno cited trade data revealing a record USD 112 billion gap between goods China reported exporting to the United States last year and those formally logged by US Customs and Border Protection upon arrival. He argued the discrepancy suggests that as much as one-quarter of all Chinese shipments to the US last year may have escaped tariff enforcement entirely.

'Illegal transshipment is a deliberate scheme by foreign manufacturers, overwhelmingly based in the People's Republic of China, to falsify where their goods are made, launder them through a third country, slap on a new label, and dump them into the American market, eluding tariffs and other duties imposed on the true country of origin,' Moreno wrote in the letter.

Ohio's Automobile Sector in the Crosshairs

The senator underscored the direct threat to his home state, noting that the automobile industry supports more than 329,400 jobs in Ohio and contributes USD 41.43 billion to its gross state product. He pointed specifically to a January 2024 federal search at the Moraine, Ohio plant of Harco Manufacturing Group, the US subsidiary of Chinese auto parts maker Qingdao Sunsong.

Homeland Security Investigations executed the search warrant. Prior congressional investigations had identified Qingdao Sunsong over allegations that it circumvented Section 301 tariffs by routing products through Thailand, where they reportedly underwent only limited transformation before being shipped onward to the United States.

'This is what illegal transshipment looks like: Chinese companies setting up shadow operations in other countries to cheat US trade laws while American businesses play by the rules,' Moreno wrote.

What the Senator Is Asking For

Moreno expressed support for the Trump administration's broader tariff policy but cautioned that duties are only as effective as their enforcement. He acknowledged the department's existing tools — including the use of artificial intelligence to improve supply-chain visibility, Enforce and Protect Act investigations, and the work of Homeland Security Investigations' Global Trade and Investigations division — while urging officials to assess whether additional statutory powers are needed to pursue tariff evaders.

Legal Framework and Background

Section 301 of the Trade Act of 1974 authorises the United States to respond to foreign trade practices deemed unfair or discriminatory. The Trump administration imposed several rounds of Section 301 tariffs on Chinese goods during its first term, and enforcement of those measures has remained a contested front in the broader US-China trade dispute. Moreno's letter signals growing congressional pressure to treat tariff evasion with the same urgency as the original tariff policy itself.

With the trade gap widening and domestic manufacturers voicing alarm, the Homeland Security Department's response to the letter is expected to draw close scrutiny from both industry groups and trade-policy watchers in the months ahead.