The Trump administration has intensified economic pressure on China's western Xinjiang zone, banning the import of cotton from a powerful Chinese quasi-military organization that claims to use the forced labor of Uighur Muslims detained.
On Wednesday, the US Customs and Border Protection Agency said its "Withhold Release Order" would ban cotton and cotton products from one of China's largest producers, the Xinjiang Production and Construction Corps (XPCC).
The step, which could have a sweeping impact on businesses involved in the export of textiles and apparel to the United States, is one of many that the Trump administration has been working on in its final weeks to harden the US stance against China, making it harder for President-elect Joe Biden to ease tensions between the US and China.
Secretary Kenneth Cuccinelli of the Department of Homeland Security, who manages the border agency, called "Made in China" a "warning label."
"During this season of giving, the cheap cotton goods you may be buying for family and friends - if coming from China - may have been made by slave labor in some of the most egregious human rights violations existing in the modern world today," he said at a news conference.
"A region-wide Xinjiang cotton import ban was still being examined," Mr. Cuccinelli said.
The United Nations cites what it claims are reliable accounts that have been put to work 1 million Muslims held in camps. China denies mistreating the Uighurs and maintains that the camps are essential vocational training centers to combat extremism.
BROAD EFFECT
While the Treasury sanctions target the financial framework of XPCC, Wednesday's action will push apparel companies and other companies shipping cotton products to the United States to remove cotton fiber provided by XPCC from several phases of their supply chains, said Brenda Smith, executive assistant trade commissioner of CBP.
A China-based cotton trader, who asked not to be named because of the sensitivity of the problem, said That pretty much blocks all Chinese cotton textile imports."
Identifying cotton from a particular supplier would increase production costs sharply, and only a few large companies with fully integrated operations around the complex textile supply chain will be able to ensure that no XPCC commodity has been used, the trader said.
"It just depends on how much documentation they want to provide. It's going to be incredibly difficult if they want real evidence that this cotton has not been used," he said.
The Thomson Reuters Foundation was told by major clothing brands such as Gap Inc, Patagonia Inc, and Zara owner Inditex that they did not originate from factories in Xinjiang, but that they could not guarantee that their supply chains were free of cotton picked from the area.
The XPCC could not be contacted for comment immediately. The National Garment and Clothing Council of China declined to comment. The China Cotton Textile Association could not be reached right away.
In September, CBP considered a much wider import ban on all Xinjiang cotton and tomato products, but it declared narrower bans on products from particular companies, including two smaller producers of cotton and apparel, after opposition from within the Trump administration.
A wider ban was criticized by US apparel producers as difficult to enforce, but the XPCC-specific ban was accepted by clothing and retail groups on Wednesday. In a statement, the organisations, including the American Apparel and Footwear Association and the National Retail Federation, said they were on the "front lines of efforts to guarantee that forced labor does not contaminate our supply chains or enter the United States."
Joe Biden has vowed to work with US allies to put pressure on China to curtail violations of human rights and trade. In recent weeks, Mr Trump has stepped up action against major Chinese state-owned firms, prohibiting access to US technology and investment.
