US acts against Xinjiang cotton

• Trump administration says military outfit uses slave labour of detained Muslims, but China says camps are vocational training centres to fight extremism

The Trump administration has increased economic pressure on China s

’ western region of Xinjiang, banning cotton imports from a powerful Chinese quasi-military organisation that it says uses the forced labour of detained Uighur Muslims. The move could have a sweeping effect on companies involved in selling textiles and apparel to the US.

The Trump administration has increased economic pressure on China's western region of Xinjiang, banning cotton imports from a powerful Chinese quasimilitary organisation that it says uses the forced labour of detained Uighur Muslims.

The US Customs and Border Protection (CBP) agency said on Wednesday that its "withhold release order" would ban cotton and cotton products from the Xinjiang Production and Construction Corps (XPCC), one of China's largest producers. The move, which could have a sweeping effect on companies involved in selling textiles and apparel to the US, is among several the Trump administration has been working on in its final weeks to harden the US position on China, making it harder for president-elect Joe Biden to ease US-China tension.

The targeting of XPCC, which produced 30% of China s cotton in 2015, follows a treasury department ban in July on all dollar transactions with the sprawling business-and-paramilitary entity, founded in 1954 to settle China's far west.

Department of homeland security secretary Kenneth Cuccinelli, who oversees the border agency, called made in China a warning label.

"The cheap cotton goods you may be buying for family and friends during this season of giving if coming from China — may have been made by slave labour in some of the most egregious human rights violations existing today in the modern world,” he told reporters.

Cuccinelli said that a regionwide Xinjiang cotton import ban was still being studied. The UN cites what it says are credible reports that 1-million Muslims held in camps have been put to work. China denies mistreating Uighurs and says the camps are vocational training centres needed to fight extremism.

BROAD IMPACT

While the treasury sanctions target XPCC s financial structure,

Wednesday's action will force apparel firms and other companies shipping cotton products into the US to eliminate XPCC-produced cotton fibre from many stages of their supply chains, said Brenda Smith, CBP's executive assistant commissioner for trade.

"That pretty much blocks all Chinese cotton textile imports,” said a China-based cotton trader, who asked not to be identified because of the sensitivity of the issue.

Identifying cotton from a specific supplier will sharply raise manufacturing costs, and only the few large companies with fully integrated operations across the complex textile supply chain could guarantee that no XPCC product has been used, the trader said.

"It really depends on how much proof they want. If they want real proof that this cotton has not been used, that's going to be extremely difficult,” he said.

Major clothing brands including Gap, Patagonia and Zara owner Inditex have told the Thomson Reuters Foundation they did not source from factories in Xinjiang but that they — could not confirm that their supply chains were free of cotton picked from the region.

The XPCC could not immediately be reached for comment. The China National Textile and Apparel Council declined to comment. The China Cotton Textile Association could not immediately be reached.

In September, CBP considered a much broader import ban on all cotton and tomato products from Xinjiang, but after dissent from within the Trump administration, it announced narrower bans on products from specific entities including two smaller cotton and apparel producers.

US apparel makers had criticised a broader ban as impossible to enforce, but on Wednesday clothing and retail groups welcomed the XPCC-specific ban. The groups including the American Apparel and Footwear Association and the National Retail Federation, said in a statement they were on the "front lines of efforts to ensure forced labour does not taint our supply chains or enter the United States"

Biden has pledged to work with US allies to bring pressure on China to curb human rights and trade abuses.

President Donald Trump has in recent weeks increased action against major Chinese state companies, banning access to US technology and investments.