US Blocks Shipment Of Japanese Shirts On Suspicion They Were Made In Xinjiang

US Blocks Shipment Of Japanese Shirts On Suspicion They Were Made In Xinjiang

In the first confirmed case of US retaliation against allegations of Chinese quasi slavery, a shipment of shirts for Japan’s Uniqlo chain was blocked from entering the U.S in January on suspicion they were made with forced labor in China’s Xinjiang region. Uniqlo parent Fast Retailing protested the block, claiming that all the cotton involved was grown outside of China, but the US denied the protest because there was not sufficient evidence to disprove the claim.

A Customs and Border Protection document dated May 10 shows that the agency confiscated the shirts at the Port of Los Angeles, suspecting they were made by Xinjiang Production and Construction Corps, and follows a US ban in December of all cotton product shipments made by XPCC due to suspicions of forced labor in the region.

In response, Fast Retailing – Japan’s sixth most valuable listed company – on Wednesday called the U.S. customs decision “very regrettable.”  In its customs document, Uniqlo said the raw cotton used in the shirts was produced in Australia, the U.S. and Brazil, with no connections to Uyghur labor.

In response, the U.S. agency ignored the protest, and said Uniqlo failed to provide enough evidence that its products were free from forced labor, citing a lack of information on the production process and insufficient production records.

CEO Tadashi Yanai declined to comment on questions regarding cotton in the Xinjiang region during a news conference in April, but the company addressed the matter in an August 2020 statement.

“No Uniqlo product is manufactured in the Xinjiang region,” Fast Retailing said in the statement. “In addition, no Uniqlo production partners subcontract to fabric mills or spinning mills in the region.”

While North American sales make up only small percentage of Fast Retailing’s total, and the blocked shipment is expected to have a minimal impact on the company’s earnings, the Nikkei notes that , “the seizure highlights how allegations of Chinese human rights abuses against the Uyghur ethnic minority in Xinjiang have become a risk for Japanese companies.”

And in the context of already snarled supply chains which have sent the prices of countless products soaring, Rabobank’s Michael Every cautions, “think how tricky this will make exporting textiles ahead” if all it takes for a block at the US border is the mere suspicion that it originates in the contentious Chinese region.

Tyler Durden
Wed, 05/19/2021 – 20:39

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