U.S. Halts Imports from 26 Additional Chinese Companies Due to Forced Labor Concerns

The U.S. will prohibit imports from numerous Chinese textile companies due to their suspected connections to forced labor, a decision prompted by U.S. industry grievances about unfair competition.

On Thursday, the Biden administration is set to announce the inclusion of 26 companies to the Uyghur Forced Labor Prevention Act Entity List. This list identifies businesses that the U.S. claims are involved in utilizing forced labor from China’s Xinjiang region, which is inhabited by the Uyghur people and other minority groups.

“We will not allow goods produced in whole or in part through forced labor to enter the United States,” said Homeland Security Secretary Alejandro Mayorkas. “We’re shining a light on it.”

These additions significantly increase the size of the UFLPA list, and along with a change in methodology, bring the total number of banned companies to 65. All the companies named on Thursday are part of China’s textile industry, which has sparked complaints of unfair competition from domestic manufacturers.

The named businesses act as intermediaries, sourcing cotton from Xinjiang and selling it mainly to Chinese companies that use it to spin thread or produce fabric. Thursday’s actions aim to make responsible businesses aware of potential abuse in their supply chains, Mayorkas explained.

Under the UFLPA, all imports connected to Xinjiang have been effectively prohibited since 2022, with U.S. officials continually urging companies to thoroughly examine their supply chains.

The list specifies certain companies whose products are banned, even if used as components in finished goods. This precision can provide clarity for businesses striving to comply with the law but may also cause complications. For instance, in February, Volkswagen reported that thousands of its Bentley, Porsche, and Audi vehicles were delayed at U.S. ports because a part was sourced from a listed supplier.

Thursday’s additions could strain corporate supply chains. China is the U.S.’s largest foreign source of textiles and apparel, encompassing clothing and components for personal protective equipment and other uses.

U.S. industry groups have criticized China’s textile manufacturers for unfair competition, partly due to the use of forced labor, and have called for increased government action to protect U.S. textile companies.

“China’s unchecked foreign predatory trade practices, along with insufficient customs enforcement and misguided trade policy proposals, have created an unstable market dynamic threatening the future of domestic textile manufacturing,” said Kim Glas, president of the National Council of Textile Organizations, on Tuesday following the announcement of new tariffs targeting China.

Mayorkas emphasized that companies need clearer insights into their supply chains and stated that he was open to criminal prosecutions in cases where companies deliberately misled U.S. authorities.

The Biden administration has also faced pressure to address a trade law provision allowing duty-free import of packages valued under $800 with minimal customs scrutiny. Imports under this method, known as the de minimis exemption, have surged, with e-commerce companies Shein and Temu alone accounting for nearly a third, according to one analysis.

Last month, the Biden administration announced increased scrutiny of de minimis shipments as part of a broader effort against illicit apparel and textile imports. Mayorkas acknowledged industry concerns that “illegitimate or irresponsible” companies might be exploiting the exemption and is considering possible changes to the law.