The United States has also imposed restrictions on two more Chinese companies with connections to the Xinjiang region amid allegations of forced labor. The ruling has come days after a response from Beijing against accusations of human rights abuses and claimed discriminatory moves by American firms.
On Wednesday, the Department of Homeland Security added a Chinese steelmaker and a producer of artificial sweeteners to the Uyghur Forced Labor Prevention Act Entity List.
It now lists 75 entities, prohibits imports wholly or partially produced in the Chinese region of Xinjiang Uyghur in light of the presumption that their production processes involve forced labor by Uyghurs and other ethnic minorities.
Today’s actions reaffirm our commitment to removing the taint of forced labor from U.S. supply chains and upholding the values of human rights for all,” said Robert Silvers, under secretary for policy at the Department of Homeland Security.
The listed companies are the first from their respective sectors to be added, as the Treasury previously targeted firms mainly linked to the vast cotton and textile industries in Xinjiang.
“No sector is off limits. We will continue to identify entities across industries and hold accountable those who seek to profit from exploitation and abuse,” Silvers said.
The UFLPA was signed into law in December 2021, after the U.S. accused the Chinese government of detaining and exploiting Uyghurs, a majority Muslim group, and other ethnic and religious minorities in Xinjiang for years.
China has always denied the charges. With tensions between the U.S. and China sharply rising, the entity list is turning into one of the biggest elements in the current trade decoupling between the two largest economies in the world.
Last week, Beijing counter attacked against the import bans by announcing an investigation into the U.S. company behind the fashion brands Tommy Hilfiger and Calvin Klein, for “discriminatory practices” against companies that use Xinjiang cotton.
The company, PVH, has operations both in the U.S. and China and is part of a fast expanding group of foreign businesses trying to distance themselves from accusations of forced labor in Xinjiang.
Thus, China’s Ministry of Commerce has taken the firm to task, accusing it in state run media of “violating standard market trading principles and boycotting cotton and other products from Xinjiang without a factual basis.”
It added that PVH has 30 days to plead its case with the authorities. If it does not, the consequences include being put on China’s “unreliable entities” list, to face further punishments and limits. The company, one of the key ones with operations both in China and the U.S., told CNBC it was in contact with Chinese officials.
“In line with our company policy, PVH complies with all relevant laws and regulations in each country and region where we do business,” said the company, emphasizing its stance to “act in compliance with relevant laws and regulations.”
China has earlier placed US companies, including defence contractors Lockheed Martin and Raytheon, on its entity list over their activities and business ties in Taiwan.
The European Union has also adopted new legislation that prohibited goods produced with forced labor and obligated large enterprises to conduct human rights and environmental audits of their suppliers abroad. It is reported that Taiwan is thinking of enacting similar legislation regarding forced labor, inspired by the UFLPA.
