Xinjiang China Cotton, Tomatoes Get Forced Labor Ban By US Homeland
The Department of Homeland Security and Customs and Border Protection (CBP) said on Wednesday that if your T-shirt is made with Xinjiang cotton, and your Heinz ketchup packets come from Xinjiang tomatoes, they’re going to be held up in U.S. ports. They’re now banned.
Previously, these so-called Withhold Release Orders (WRO) were issued against specific companies. Today’s move takes away company specifics and targets the entire Western China state, a state that is now home to hundreds of thousands of Uyghur Muslims held in detention facilities, facilities Beijing says are needed to turn Muslims away from terrorism, and ideological beliefs that may stand counter to the ruling Communist Party.
“Today’s order instructs thousands of Customs agents at all ports of entry to detain those goods coming in from Xinjiang,” says Mark Morgan, Commissioner at CBP.
Xinjiang is the cotton and tomato growing hub of China.
Investigations by Homeland Security say there is forced labor in Xinjiang. In order to issue import banks, CPB needs to have “reasonable suspicion” of forced labor practices. Some of those sources of intel are non-governmental organizations sharing information with Washington.
The CBP said that they identified the presence of at least six labor violations used against Uyghur and other ethnic minorities in Xinjiang, including intimidation and threats; withholding wages, and debt bondage to name a few.
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The newest ban “includes canned tomatoes, tomato seeds, tomato sauce. We have a right to know where these things are made and how they are produced,” Morgan says. “Companies have the responsibility to know their supply chains. There are reputational and legal risk using forced labor in their supply chains,” he says.
CPB admits that it’s not easy to track these things. But they are getting better at it, including using new technology to track product origins. Blockchain is being looked at as a better way to do this, as well.
This is definitely not the first time China has been whacked with WROs. As recently as December. CBP issued one for Xinjiang Production and Construction Corps (XPCC). A large portion of the cotton and cotton products coming from there was connected to XPCC.
On September 14, 2020, CBP announced five WROs on companies, including laptop makers for Google Chrome. Some 13 WROs have been issued against China companies in 2020, starting in July, and the CBP says they detained over 300 shipments worth over $50 million of goods made by forced labor, though this is not all China. Most of the counterfeit and forced labor violations, however, are coming from China, CBP said in a presser this morning.
New Jersey Democrat Bill Pascrell brought up Heinz’s China sources during a House Ways & Means Committee meeting on Xinjiang that same month.
According to CBP Executive Assistant Commissioner, Brenda Smith, imports of tomato products from China were about $10 million last year. For cotton and cotton products, data is more challenging because of the processing that is done with the commodity in the first place. She said the U.S. imported $9 billion worth of cotton products from China in the last 12 months, most of which is yarn, fabric, and apparel.
Morgan said that American consumers also need to be wiser about what they are buying. “Shop with reputable retailers,” he said. “Learn about industries that are of high risk of forced labor. Consumers have incredible purchasing power and we urge them to use it.”
The CBP enforces around 500 different trade laws across some 49 different agencies. Eliminating forced labor from U.S. supply chains is an integral, if not daunting, part of their mandate.
Ken Cuccinelli, the Deputy Secretary for the U.S. Department of Homeland Security, estimates that forced labor generates over $100 billion in profits every year, globally. Always, the goals of these companies are to lower production costs in order to sell goods below market rates, which introduces uneven competition into global supply chains. “This ultimately hurts U.S. businesses and workers,” Cuccinelli says. “Forced labor is a human rights abuse…that damages our economy.”
Importers bear the responsibility for knowing their supply chain sourcing. Once a company is subject to a WRO, it is incumbent on them to show that their supply chains are clean. Sometimes this requires third-party validation by audit agencies that are experienced in verifying labor issues. The WRO can be lifted once companies make their case to the contrary.
The regional ban will likely lead to Customs to just add all of the companies in Xinjiang province involved in cotton and tomato production to get banned in a guilty until proven innocent move.
“If you look at the last year, there have been more WROs issued by us than at any period in our history,” says Cuccinelli. “No one has ever successfully challenged a WRO from CBP, period, full stop. This WRO is airtight.”
Cuccinelli took what may be one last parting shot against China as head of Homeland.
“I’ve said this before, Made in Chian does not just indicate a country of origin…it’s a warning label,” he said, noting that this year the CBP has seized at American ports unapproved Covid test kits.
But perhaps even more disturbing that medical kits that might not even work, Xinjiang supply chains are tainted by “flagrant human rights violations,” he says.
“The Chinese government has detained over 1 million people in Xinjiang and victims are forced to political indoctrination and forced sterilization. The Chinese head of the Xinjiang region issued a directive to ‘round up everyone who should be rounded up’,” Cuccinelli concluded. “I think you can figure out what that means.”