The US government is set to announce on Friday (May 17) that it is blocking imports from 26 Chinese textile companies over suspicions of engaging in forced labor in the Xinjiang region.
This move comes after the Department of Homeland Security responded to complaints from US industry and significantly expands the list of Chinese textile companies prohibited from entering the US.
According to the Federal Register, the Biden administration will announce on Friday that 26 companies will be added to the Entity List of the Uyghur Forced Labor Prevention Act (UFLPA). This list identifies companies involved in exploitation and forced labor in the Xinjiang region, where the Chinese Communist Party stands accused of perpetrating genocide against the Uyghur people and implementing forced labor practices.
The 26 Chinese companies being added to the list include China Textile Group Limited, subsidiaries of China National Cereals, Oils, and Foodstuffs Corporation, cotton and textile companies operating across various provinces, as well as related logistics and warehousing companies.
These Chinese firms act as intermediaries, sourcing cotton from Xinjiang and selling it mainly to other Chinese companies that produce yarn or fabric.
Homeland Security Secretary Alejandro Mayorkas stated, “We will not allow goods produced entirely or in part by forced labor to be imported into the United States.”
The addition of these companies to the list significantly expands the scope of the UFLPA, bringing the total number of banned entities to 65, nearly a 50% increase.
Mayorkas explained that Friday’s action aims to make responsible companies aware of potential labor trafficking practices in their supply chains.
This move comes as the US intensifies efforts to combat imports associated with forced labor, particularly goods from Xinjiang, a region known for producing cotton, solar panels, and other products but also facing allegations of widespread human rights abuses. The Chinese authorities have repeatedly denied these accusations.
Since 2022, all imports related to Xinjiang have been effectively banned under the UFLPA, with US officials urging companies to examine their supply chains regularly.
Companies added to this list face bans not only on the final products they manufacture but also on components used in their products. While this specificity provides more clarity for businesses trying to comply with the law, it may pose challenges – for example, Volkswagen announced in February that US authorities seized thousands of Bentley, Porsche, and Audi cars because a part was manufactured by a listed supplier.
The new list announced on Friday may put pressure on supply chains. China is a major foreign source of textiles and apparel for the US, including clothing, personal protective equipment, and components for various applications.
US industry groups have complained about unfair competition by Chinese textile manufacturers, citing the use of forced labor, and have called on the government to take more action to protect American textile companies.
Kim Glas, Chair of the National Council of Textile Organizations, expressed concerns following the US government’s announcement of new tariffs on China, stating, “China’s unbridled predatory trade practices, coupled with lax customs enforcement and misguided trade policy recommendations, have created unstable market dynamics that threaten the future of the domestic textile manufacturing sector.”
Mayorkas emphasized that companies need a clearer understanding of their supply chains and that deliberate attempts to mislead US authorities could result in criminal prosecution.
The Biden administration is also under pressure to address a provision in trade law that allows duty-free imports of packages valued below $800 with minimal customs scrutiny. Analysis shows that this low-value exemption has led to a surge in imports of small goods from China, with e-commerce companies Shein and Temu accounting for nearly a third of these imports.
Last month, the administration announced plans to tighten scrutiny on small goods imports as part of broader efforts to combat illegal apparel and textile imports.
Mayorkas expressed concerns similar to those in the industry that “illegal or irresponsible” companies could exploit the low-value exemption and is exploring potential amendments to the law.