Wanxiang to pay $53 million to resolve US probe into imported Chinese auto parts, DOJ says

The Justice Department said on Thursday it had reached a settlement with the U.S. arm of Chinese auto parts supplier Wanxiang over import tariffs owed on wheel hub assemblies and other parts imported from China over a five-year period.

The U.S. government said the settlement ends nearly 10 years of litigation, with the United States collecting all the lost revenue it sought and over $30 million in civil penalties. Wanxiang America did not admit wrongdoing. The Justice Department said Wanxiang falsely classified its imported wheel hub assemblies and failed to disclose the parts were covered by the anti-dumping tariff order imposed in 1987, which resulted in the auto parts company vastly underpaying the amount of customs and anti-dumping tariffs owed on its merchandise.

The government said some of the parts at issue faced tariffs of nearly 93% under the anti-dumping order.

Wanxiang and two U.S.-based lawyers for Wanxiang did not immediately respond to requests for comment.

Wanxiang Group's automotive parts unit has previously been described as the largest China-based automotive components company by revenue. In 2013, Wanxiang America won approval to buy A123 Systems, a U.S. maker of electric car batteries.

The U.S. government first demanded payment in 2019 of nearly $100 million in back tariffs and penalties after launching an audit in 2012. The government filed suit in 2022 over Wanxiang parts imported from 2007 through 2012. The Justice Department said Wanxiang "misclassified multiple categories of automotive components, parts, and accessories under incorrect tariff provisions."