US Sues Executive for Tariff Evasion on Chinese Imports

The Department of Justice in Washington on July 29, 2024. Madalina Vasiliu/The Epoch Times

The United States has opened a civil suit against a furniture company executive for allegedly making false statements to customs officials to avoid paying import duties on products manufactured in China to be sold in the United States.

The Department of Justice (DOJ), Customs and Border Protection, and Homeland Security Investigations officials announced the suit on Oct. 31, alleging Lawrence Bivona, former president of Delaware-based company LaJobi Inc., evaded paying around $7 million in duties. The company sold children’s furniture.

The goods that Bivona imported were subject to tariffs of 216 percent, but the executive allegedly made false statements that resulted in the company only paying up to 7 percent import duty rates. According to the DOJ, Bivona misrepresented the manufacturers of goods imported so the company could pay lower duties.

The tariff had been implemented as an antidumping measure to counter the Chinese communist regime’s subsidization of Chinese industries to the point of harming United States businesses, according to officials.

“Anti-dumping duties play an important role in countering illegal foreign trade practices and protecting U.S. manufacturers,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the DOJ’s Civil Division. “We will continue to pursue those who seek to gain an unfair advantage by violating our trade laws.”

The furniture imports occurred in 2009 and 2010. The government is seeking $15 million in civil penalties in addition to $7 million in recovery of unpaid tariffs.

Earlier this month, the interagency fraud task force similarly brought civil action against a former energy executive for evading tariffs on imported Chinese solar panels between 2014 and 2018, seeking $300,000 in recovery of unpaid duties and $800,000 in civil penalties.

The United States, the European Union, and other nations have recently increased the use and enforcement of tariffs on Chinese imports to combat the Chinese Communist Party’s (CCP’s) trade practices. China under the CCP does not have a free market economy; the regime instead sets and enforces industry output to align with the regime’s goals.

U.S. and international trade officials continue to warn that the CCP’s “predatory“ trade practices are meant to run global competitors out of business. The CCP may subsidize a Chinese industry so that it can export goods at a price so far below market rate that foreign businesses cannot compete, a practice known as dumping. The European Union recently hiked tariffs on Chinese electric vehicles to up to 45 percent after a year-long investigation concluded that Chinese makers were dumping their products on the European market. The vast majority of the EU’s trade investigations last year targeted imports from China.

White House national security adviser Jake Sullivan recently said these tariffs have helped prevent a second “China shock” on U.S. industries.

“The PRC [People’s Republic of China] is producing far more than domestic demand, dumping excess onto global markets at artificially low prices, driving manufacturers around the world out of business and creating a choke hold on supply chains,” Sullivan said at a Brookings Institution event in Washington on oct. 23.

U.S. officials and lawmakers have also highlighted national security risks as an additional reason to limit Chinese imports, recently proposing a new rule to ban Chinese auto parts for connected vehicles.