[CTC] U.S. Bans Cotton, Tomato Imports From China’s Xinjiang Region

[Arthur Stamoulis]

https://www.wsj.com/articles/u-s-bans-cotton-tomato-imports-from-chinas-xinjiang-region-11610572070?page=2 <https://www.wsj.com/articles/u-s-bans-cotton-tomato-imports-from-chinas-xinjiang-region-11610572070?page=2>
 
U.S. Bans Cotton, Tomato Imports From China’s Xinjiang Region

By Eva Xiao
1/13/21
 
The Trump administration on Wednesday banned imports of cotton and tomato products from Xinjiang, the broadest U.S. ban yet to target allegations of forced-labor practices in the northwest Chinese region.

U.S. Customs and Border Protection said agents have been instructed to detain shipments containing these products, including those routed through or assembled in third countries in products such as apparel or tomato sauce.

The U.S. and other Western governments have criticized Beijing for human-rights abuses in Xinjiang <https://www.wsj.com/articles/china-shifts-to-new-phase-in-campaign-to-control-xinjiangs-muslims-11580985000?mod=article_inline>, where the Chinese government has rounded up Turkic-speaking Uighurs and other predominantly Muslim minorities into a regionwide network of internment camps <https://www.wsj.com/articles/china-acknowledges-re-education-centers-for-uighurs-1539191503?mod=article_inline>.
 
Companies face increasing scrutiny over their supply chains in China <https://www.wsj.com/articles/western-companies-get-tangled-in-chinas-muslim-clampdown-11558017472?mod=article_inline>. The new ban could have a significant impact especially in the apparel sector, which has already faced a number of customs restrictions amid concern about forced labor linked to the camps.
Beijing has denied such allegations and calls the camps vocational training centers. A spokesperson for the Chinese Embassy in Washington called the forced-labor allegations groundless and criticized Wednesday’s order as an attempt by the U.S. to suppress Xinjiang enterprises.

China is one of the world’s top cotton producers. Xinjiang produced 5 million metric tons of cotton in 2019, or about 85% of China’s total production, according to the National Bureau of Statistics of China. The U.S. imported approximately $9 billion in cotton products from China and $10 million in tomato products in the past year, according to Brenda Smith, executive assistant commissioner at the Customs agency’s Office of Trade.

Four trade associations—the American Apparel and Footwear Association, the National Retail Federation, the Retail Industry Leaders Association, and the U.S. Fashion Industry Association—together said they looked forward to working with U.S. Customs, while urging the agency to share the evidence that led to the new ban.

Wednesday’s order “matches our members’ accelerated commitment in this region,” the groups said. “The industry is pioneering and implementing new technologies and innovative approaches to decipher where supply chains are susceptible to forced labor,” particularly in Xinjiang, they added.

Ketchup producer Kraft Heinz <https://www.wsj.com/market-data/quotes/KHC> Co. has one supplier in Xinjiang, but none of those tomato products are exported to or used in the U.S., said a company spokesman. “Consequently, we do not anticipate any impact” from Wednesday’s order, he said, adding that all Kraft Heinz suppliers are regularly audited by a third party.
The Trump administration has pressured U.S. companies with businesses linked to Xinjiang over the past year, pushing them to closely monitor their supply chains for potential exposure to forced labor.

Customs officials who suspect a product was made with forced labor can issue withhold-release orders for agents to stop that cargo from certain suppliers at a U.S. port. Stopped shipments would trigger an investigation into how the goods were made and potentially steep fines.

Companies whose shipments have been seized will have to provide proof showing the absence of forced labor, or that forced labor conditions have been mitigated, through documentation such as payroll records and third-party audits, said Ms. Smith.

That could run into obstacles as some independent auditors have said they would no longer help companies audit their supply chains in Xinjiang <https://www.wsj.com/articles/auditors-say-they-no-longer-will-inspect-labor-conditions-at-xinjiang-factories-11600697706?mod=article_inline>. Companies looking over their supply chains also face the challenge of tracing Xinjiang cotton, which is often mixed with raw material from other Chinese regions before being spun into yarn.
Last year, U.S. Customs issued nine withhold-release orders against Chinese entities, eight of which were linked to forced-labor allegations in Xinjiang.

Under such an order issued in November <https://www.wsj.com/articles/u-s-bans-cotton-products-from-chinese-firm-linked-to-alleged-forced-labor-11606954687?mod=article_inline> on cotton products produced by the Xinjiang Production and Construction Corps, a state-owned paramilitary organization known as XPCC, U.S. Customs detained 43 shipments valued at more than $2 million, said Ms. Smith.
In July, the Treasury Department imposed its own sanctions <https://www.wsj.com/articles/u-s-sanctions-china-paramilitary-organization-over-uighur-human-rights-concerns-11596222823?mod=article_inline> on XPCC, as well as two men connected to the group, freezing assets connected to them within any U.S. jurisdiction. Alleging links to human-rights abuses, the Commerce Department blacklisted Chinese manufacturers that supply to top U.S. companies <https://www.wsj.com/articles/blacklisting-of-chinese-firms-rattles-american-supply-chains-11595343494?mod=article_inline> for human-rights abuses in Xinjiang.
Other Western countries are also stepping up pressure on China because of concerns over forced labor in Xinjiang.

This week, U.K Foreign Secretary Dominic Raab said British companies would face fines unless they can show their supply chains don’t use forced labor. In December, the European Union adopted a resolution strongly condemning China over allegations of forced labor by minorities in Xinjiang.


Arthur Stamoulis
Citizens Trade Campaign
(202) 494-8826




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