The Biden administration will block 29 Chinese companies based on allegations of forced labour in China’s Xinjiang Region.
This is the biggest expansion of the Uyghur Forced Labor Prevention Act’s (UFLPA) Blacklist to date. The Uyghur Forced Labor Prevention Act aims at addressing human rights concerns as well as unfair trade practices.
The blacklist now includes over 100 entities, including those in the mining, agriculture and metals sectors.
Importers will have to prove that the goods they import are not connected with forced labour before their products can be admitted into the US.
Xinjiang, the UFLPA and enforcement
Xinjiang is a major hub of production for cotton, solar panel components and tomatoes. It has been the focus of US efforts to crack down on forced labor.
The UFLPA has been a cornerstone in the Biden administration’s trade policy towards China since it was signed into law and implemented from 2022.
Alejandro Mayorkas, Homeland Security Secretary, reaffirmed the commitment of the administration to hold organizations accountable for violations of human rights.
He said, “Our enforcement efforts are stronger than ever.”
US Customs and Border Protection reports that since the law went into effect, about $3.66 billion in shipments were blocked or delayed.
Many businesses were forced to reevaluate the supply chain to ensure compliance with the law.
China has denied the allegations of human rights violations in Xinjiang and labelled UFLPA interference in internal affairs.
Impact on key industries
These newly added businesses are primarily in the agriculture sector, but also include companies involved in mining or smelting metals like aluminum and lithium.
The global supply chain is a critical part of the industry, especially for technologies that use renewable energy.
The US wants to stop the importation of goods that are linked to forced labor by intensifying its enforcement.
This could cause supply chains to be strained and businesses with ties to the region to face increased scrutiny.
Critics say that the administration needs to expand the blacklist further and enforce more strict measures.
Mayorkas said that the current approach is justified, saying, “We have made tremendous strides in our investigative abilities and we are increasingly leveraging technologies to identify problematic suppliers.”
Politics and global implications
The action on Friday reflects bipartisan support to address forced labour concerns.
The UFLPA was passed by Congress with a near-unanimous approval. This has led the US to adopt a more aggressive stance in regard to human rights violations, while also complicating their trade relations with China.
Senator Marco Rubio is one of the bill’s sponsors and has called for a more aggressive enforcement. This follows calls by other legislators.
The addition of these names to the blacklist could be the last major action under the current enforcement framework implemented by the Biden administration.
Global trade and business outlook
UFLPA enforcement is forcing companies to improve supply chain transparency, or face having their shipments refused entry into the US.
It could be a standard for compliance to use advanced technology to track goods to their origins.
The expansion of the blacklist comes at a time when tensions remain high between the US, China and other countries. It highlights the difficulty in balancing economic and trade policy with human rights concerns.
This article US to blacklist 29 Chinese companies: Here’s Why appeared first on ICD
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