On March 10, 2026, the US International Trade Commission (USITC) announced the launch of a Section 337 investigation targeting 20 automotive parts manufacturers across Taiwan, China, and the US. The probe follows a lawsuit filed by General Motors (GM) and includes 10 leading Taiwanese aftermarket (AM) suppliers such as Tong Yang Industry, DEPO Auto Parts, and Gordon Auto Body Parts. This unexpected patent litigation has come as a shock to Taiwan's automotive collision parts exporters, and also signals a shifting competitive landscape in the global automotive supply chain.
Section 337 investigations are conducted under the corresponding section of the Tariff Act of 1930 to address unfair trade practices involving imported products, including patent infringement or monopolistic behavior. The USITC can impose sanctions against implicated products if it deems that violations have occurred.
The Taiwanese companies under scrutiny span the full automotive parts supply chain, from plastic and exterior component makers like Tong Yang, Y.C.C. Parts, Forerunner Automotive Industrial, and Pro Fortune Industrial, to sheet metal and body part firms such as Gordon, AP Auto Parts Industrial, Auto Power, and Grand HC Auto Tooling. Precision lighting and trading manufacturers are also named.
Most of the companies have yet to receive formal notices: Gordon declined to comment, while Tong Yang stated that it is monitoring developments.
Industry experts note that Taiwan has long been a key global supplier of AM auto parts, with the US as its primary export market. Many targeted Taiwanese firms produce components widely used in top-selling GM pickup trucks and SUVs in the US.
Investigation could potentially wipe out market share
As original equipment manufacturers (OEMs) seek to regain control over the lucrative aftermarket repair segment, cost-efficient Taiwanese AM suppliers have naturally become prime targets.
Section 337 investigations proceed rapidly compared to typical anti-dumping cases: defendants must file responses within 20 days, with final rulings coming within 12 to 16 months. Moreover, legal fees for hiring specialized US law firms often run into the millions of dollars, which becomes a heavy burden, especially for small and medium-sized parts makers.
If found infringing, the USITC may issue Limited Exclusion Orders banning implicated products from entering the US market. For some Taiwanese companies that derive over 50% of revenue from the US, such bans would effectively cut them out of North America and instantly erase their market share.
Although exports can continue during the investigation, US distributors and retailers like AutoZone and Advance Auto Parts tend to reduce orders or demand higher guarantees to mitigate future supply risks, which further weakens Taiwanese suppliers' bargaining power at the distribution level.
Section 337 probe reflects ongoing industry trends
While Taiwanese firms have faced Section 337 probes before, this case stands out for its scale and focus, which reflects two emerging trends in the industry.
First is the weaponization of patents. OEMs have in the past tolerated AM parts, but electrification trends and low margins on new vehicles amid heightened competition have pushed automakers to use patent law—especially design patents—to reclaim the profitable repair parts market.
Second is supply chain risk mitigation. As geopolitical uncertainties arise, US companies have been increasingly leveraging administrative and trade tools like Section 337 investigations and Section 232 tariffs to restructure global supply chains.
Given these trends, industry insiders believe Taiwanese parts makers can no longer compete solely on price and quality. Some large players may opt to negotiate patent licensing agreements with OEMs, paying royalties to maintain market access. Simultaneously, they need to boost R&D capabilities to develop alternative parts with distinct designs but equivalent functions, so as to reduce infringement risks.
Another key strategy to combat OEM lawsuits is to accelerate certification from the Certified Automotive Parts Association (CAPA) in the US, thus guaranteeing product quality and regulatory compliance.
Experts view the Section 337 investigation as a catalyst for transforming Taiwan's automotive parts sector. Although this will lead to short-term legal costs and market pressures, it should drive a shift from manufacturing-centric models toward stronger intellectual property and technology strategies to navigate ever-tightening global trade rules.
Separately, reports indicate GM has instructed thousands of suppliers to exclude Chinese components from their supply chains and seek alternative sources outside China, as part of a long-term goal of gradually withdrawing from the China-based supply ecosystem.
Article translated by Kevin Wang and edited by Jack Wu
