The CEOs of two American companies and two Chinese corporations received letters from the Republican and Democratic Party leaders of the House Select Committee on the Chinese Communist Party (CCP) inquiring about forced labour and prohibited cotton products in the commodities they offer to American consumers.
The question of whether the clothing manufacturers abide by the Uyghur Forced Labour Prevention Act, which President Biden signed into law in December 2021, is at the heart of the situation.
Since last year, cotton from Xinjiang, where the majority of Uyghur Muslims reside, has been prohibited by Customs, which imposed limitations on cotton-related items by at least one Xinjiang-based company in 2021.
The first paragraph of each of the four letters—sent to Adidas, Nike, Shein, and Temu—is identical. The difficulties specific to the particular companies are discussed in the sections that follow.
Chairman of the House Select Committee Mike Gallagher and Ranking Member Raja Krishnamoorthi both signed the letters.
Each had around 14 questions asking about the presence of prohibited materials in their garments, and the Chinese companies also had queries regarding the quantity of shipments made in accordance with the so-called ‘de minimis’ trade requirement. This permits the transportation of all items costing less than US $ 800 duty-free.
The letters were addressed to Rupert Campbell, President of Adidas North America in Portland, John Donahue, CEO of Nike in Beaverton, Oregon, Temu President Qin Sun and its CEO Chen Lei and Yangtian “Chris” Xu, the founder of Shein.
According to a statement by Gallagher, the members of the House Select Committee were “deeply troubled” by claims that some businesses did not yet know the specifics of how their clothing was sourced. And declared that it would look into the issues raised by American businesses sourcing from Xinjiang further.
“Many American corporate leaders still don golden blindfolds when operating in China,” Gallagher said.
Of particular note was Shein for which nearly two dozen US legislators have asked the Securities and Exchange Commission (SEC) to prevent the Chinese garment business Shein Group from making any initial public offerings (IPOs) of stock unless it can demonstrate that it does not use cotton that was produced using Uyghur slave labour.
The China-backed international fashion e-retailer with its headquarters in Singapore is being rumoured to hold an IPO in preparation for a potential US listing before the year is out.
In a statement, Shein said it has no suppliers in the Xinjiang region and has “zero tolerance” for forced labor.
“We take visibility across our entire supply chain seriously, and we are committed to respecting human rights and adhering to local laws in each market we operate in,” the company said. “Our suppliers must adhere to a strict code of conduct.”
