Charlotte Pipe testifies to House subcommittee: transshipment and shell companies are undermining U.S. trade enforcement
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Summary
A Charlotte Pipe and Foundry representative told a House Judiciary subcommittee that Chinese exporters used transshipment and shell companies to evade antidumping and countervailing duties, prompting calls for stronger penalties and a trade-fraud enforcement unit.
WASHINGTON — Brad Mueller, a marketing and government-affairs official for Charlotte Pipe and Foundry, told a House Judiciary subcommittee that Chinese exporters have repeatedly used transshipment, shell companies and other customs fraud to avoid U.S. antidumping and countervailing-duty (AD/CVD) orders.
Mueller said his company, a 124-year-old U.S. manufacturer, has documented what it called extensive evasion after the Department of Commerce found Chinese exporters had underpriced cast-iron pipe and fittings by as much as 345% and 494%, respectively. "When customs investigated the locations of these alleged producers, they found an empty warehouse, a bus stop, even a massage parlor, but no foundries," Mueller testified.
Mueller told the committee Charlotte Pipe and its wholly owned subsidiary employ about 2,800 workers (1,800 plus roughly 1,000 at a subsidiary) and that his firm has spent roughly $7,000,000 pursuing trade cases and Enforce and Protect Act (EPA) petitions. He estimated that the parties evaded more than $44,000,000 in dumping duties on the company's products.
The witness described repeated patterns in which importers and foreign exporters dissolve and reconstitute shell companies after enforcement actions, and he named countries where customs found transshipment: Malaysia and Cambodia. He urged Congress to pass the Fighting Trade Cheats Act, which he said would strengthen penalties, revoke import licenses for fraud, and allow private enforcement to pursue injunctive relief. He also urged support for legislation creating a trade-fraud crime unit at the Department of Justice, describing a proposal that would provide $20,000,000 in funding to prosecute evasion.
During questioning, members asked how fraud occurred and whether U.S.-based importers were complicit. Mueller identified U.S.-based importers he said were involved in evasion and urged empowering customs and private parties to stop the flows. He also said Charlotte Pipe had litigated trademark and identity theft in Asian courts after discovering a Chinese entity selling products using Charlotte Pipe's name and logo; the witness said litigation in China had stalled and that the company won in Singapore on appeal.
Committee members broadly supported stronger enforcement tools but differed on scope and enforcement mechanisms. The record includes references to news reporting by major outlets (New York Times, Reuters, CNBC, Financial Times) cited by the witness as documenting evasion and transshipment strategies.
Ending: The hearing produced no formal action. Members signaled interest in strengthening customs enforcement, increasing criminal enforcement capacity for trade fraud, and considering private-rights-of-action measures for companies harmed by transshipment evasion.
