US Senator proposes barring Chinese firms using third countries to evade tariffs

Republican U.S. Senator Marco Rubio on Thursday proposed barring Chinese manufacturers from evading tariffs by setting up factories in other countries like Mexico, Vietnam or Malaysia.

Rubio accused Chinese manufacturers of shifting production to other countries that face lower U.S. tariffs, saying it allowed them "to evade tariffs and flood the U.S. market with cheap goods." A House committee raised concerns last week about a Chinese auto parts firm that may have sought to evade tariffs.

Rubio in March had proposed legislation to extend higher tariffs to vehicles produced by Chinese automakers in other countries like Mexico.

Biden administration officials have also raised concerns about Chinese companies seeking to set up factories to avoid tariffs. A U.S. manufacturing advocacy group in February warned imports from Mexico of cars made by Chinese automakers "could end up being an extinction-level event for the U.S. auto sector."

The Chinese Embassy in Washington did not immediately respond to a request for comment.

Last week, the U.S. Trade Representative's office locked in steep tariff hikes on Chinese imports, including a 100% duty on electric vehicles, to boost protections for strategic industries from China's state-driven industrial practices.

The action, which marks the end of a more than two-year review of tariffs that had been imposed by former President Donald Trump, mostly left unchanged the top-line duty increases announced in May by President Joe Biden.

The Biden administration also left in place Trump's tariffs on over $300 billion worth of Chinese goods ranging from toys and t-shirts to internet routers and industrial machinery at rates of 7.5% to 25%.

The U.S. and Mexico in July announced new steps to fight the circumvention of U.S. tariffs on steel and aluminum by China and other countries that ship products through Mexico, implementing a North American "melted and poured" standard for steel.